SYNOPSIS- IASbaba’s TLP 2017 [9th Feb] – Day 19

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1. What are strategic minerals. Give examples. Also discuss their distribution in the world including Asia.

Strategic minerals cover a broad category of non – metals and metals (mostly) which are critical or strategic for a nation’s growth and advancement. Usually future technology is based on them. It can be energy, defence, space technology etc. These are also called critical minerals. What is strategic today may not remain strategic tomorrow depending upon the advancement in technology and discovery of new minerals. For example, once upon a time, salt used to be a very important mineral. So much so that it was used as a currency in many countries. But now it is one of the cheapest commodities.

A European report analyses a selection of 14 minerals as critical raw material. Raw material is labelled “critical” when the risks for supply shortage and their impacts on the economy are higher compared with most of the other raw materials.

Two types of risks are considered:

1. a) the “supply risk” taking into account the political-economic stability of the producing countries, the level of concentration of production, the potential for substitution and the recycling rate.
2. b) the “environmental country risk” assessing the risks that measures might be taken by countries with weak environmental performance in order to protect the environment and, in doing so, jeopardise the supply of raw materials.

Following minerals are considered as Strategic minerals. (Note: this list changes in every five years.)

The Platinum Group Metals (PGMs) regroups platinum, palladium, iridium, rhodium, ruthenium and osmium.

Rare earths include yttrium, scandium, lanthanum and the so-called lanthanides (cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium and lutetium)

Go through the following link to get a proper understanding of Strategic Resources/Minerals

https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&ved=0ahUKEwisxp_sy4PSAhVBsY8KHQZ2BX4QFggwMAM&url=http%3A%2F%2Fwww.dtic.mil%2Fget-tr-doc%2Fpdf%3FAD%3DADA548775&usg=AFQjCNEffUlDd7-bLdetAQikCR6ZdFsZRQ&sig2=64lQKt3rT6lXh38vDu0yeA

No best answer for this question.

2. What is the significance of coal for a developing economy? Is India endowed with good coal resources? Examine.

Introduction:

Coal being a natural resource is a cheap source of energy for the growing needs in a developing economy e.g. China and India.

Body:

Importance of coal:

1. Countries like USA, Britain and all major developed European economies utilized vast resources of coal from around the world for their growth and development. This indicates a high significance of the mineral for the developing economies today.
2. It is utilized for power generation (more than 60% of India’s power is coal- based).
3. Coal is utilized in the steel industry (another key industry for development of infrastructure).
4. A lot of industries, directly or indirectly, depend on coal- paper manufacturers, pharmaceuticals, agriculture fertilizers production etc.

India’s coal reserves:

1. India was blessed with huge coal reserves. It is 5th largest in reserves (340 billion short tons) and it is 4th largest producer of coal (600 million short tons).
2. The states of Odisha, Jharkhand, West Bengal, Telangana, Madhya Pradesh and Maharashtra accounts for 99% of the country’s coal reserves. These Gondwana lands gave India a huge natural wealth.
3. But the quality of coal being average by Gross Calorific Value standards (4500 Kcal/kg), India has to import coal hugely keeping it among top 3 importers of the world.
4. India’s natural resource of coal is mainly of bituminous type while other grades of coal i.e., Anthracite and Lignite are available in less quantity.

Conclusion:

Write a brief conclusion.

Best answer: sixdustbunnies

Coal is a carbon compound which has served as the cornerstone for the development of the countries which reaped the maximum benefit during the Industrial Revolution. Countries like USA, Britain and all major developed European economies utilized vast resources of coal from around the world for their growth and development. This indicates a high significance of the mineral for the developing economies today.

It is utilized for power generation (more than 60% of India’s power is coal- based)
Coal is utilized in the steel industry (another key industry for development of infrastructure)
Used for cement manufacturing

A lot of industries, directly or indirectly, depend on coal- paper manufacturers, pharmaceuticals, agriculture fertilizers production etc.

India has an abundant supply of coal, concentrated in the West Bengal, Jharkhand, Madhya Pradesh, Chattisgarh, Odisha, Telangana, Tamil Nadu, Maharashtra regions. However, coking coal, which is essential to the steel industry, needs to be imported by India due to lack of availability within the country.

In the recent years, the limited resources of coal in the world (being a slow developing fossil- mineral), and its adverse impact on the environment, specially when used for electricity generation, have pushed for application of alternate resources. Slight progress has been made in this regard in terms of renewable energy production which can perhaps help limit the dependency of the developing and the developed countries on coal.

3. Why copper is considered as an important mineral? Does India have abundant copper? How India’s needs are met? Discuss.

Importance of copper:

1. Copper is soft and able to transmit electricity and heat very effectively. Hence very useful in electrical industry.
2. It can’t really be damaged by water and is widely used in construction.
3. As bacteria can’t grow on it, copper is also used in hospitals and has an important role in healthcare.
4. As it can be recycled, it is a very valuable resource.

Copper production in India:

India is not very lucky regarding reserves and production of copper. Mining production is just 0.2% of world’s production, whereas refined copper production is about 4% of world’s production.
Top copper producing states are:

Madhya Pradesh (56.86%): The state is blessed with a fairly large belt in Taregaon area, in Malanjkhand belt of Balaghat district.

 Rajasthan (40.82%): The Khetri-Singhana belt in Jhunjhunu district is the most important copper producing area

Jharkhand (2.62%): The major copper mines are in Singhbhum.

• Is it sufficient to meet India’s needs?

The production of copper ore in the country always falls short of our requirements and India has to import copper from other countries. The major part of supply comes from the USA. Canada, Zimbabwe, Japan and Mexico. The quantity of import varies from year to year depending upon demand and supply.

Best answer: Oolong slayer IPS

Copper is a soft, malleable, and ductile metal with very high thermal and electrical conductivity.

WHY COPPER IS IMPORTANT

– Copper is soft and able to transmit electricity and heat very effectively. Hence very useful in electrical industry.

– It can’t really be damaged by water and is widely used in construction.

– As bacteria can’t grow on it, copper is also used in hospitals and has an important role in healthcare.

– As it can be recycled, it is a very valuable resource.

India is a growing economy and development is happening at a fast pace. Although we have copper reserves in India, still its not sufficient for domestic use. Mining production is just 0.2% of world’s production, whereas refined copper production is about 4% of world’s production.
Top copper producing states are Madhya Pradesh(56.86%), Rajasthan(40.82%), Jharkhand (2.62%). The major copper mines are the Khetri copper belt in Rajasthan, Singhbhum copper belt in Bihar and Malanjkhand copper belt in Madhya Pradesh

To meet demand, India imports copper from countries like USA, Japan, Canada, Mexico, ASEAN countries etc.

WAY AHEAD:

– Need to bring into private and government production all known reserves of copper.

– Developed and developing countries were trying to buy overseas mines and the Indian government needs to play a facilitating role by offering diplomatic support.

– Indian government needs to have a sovereign funding window for domestic copper investors to acquire stake globally.

– Import duty on copper concentrates should be reduced to nil from current levels of 2.5% to make smelting lucrative.

4. What are Masala bonds? What is so special about them? Examine.

What are Masala Bonds:

1. The term is used to refer to rupee-denominated borrowings by Indian entities in overseas markets.
2. The International Finance Corporation, the investment arm of the World Bank, last November, issued a ?1,000 crore bond to fund infrastructure projects in India.
3. These bonds were listed on the London Stock Exchange. IFC then named them Masala bonds to give a local flavor by calling to mind Indian culture and cuisine.
4. These have been seen as an alternative to the External commercial borrowing (ECB), where the interest rates are in the foreign currency denomination. While ECBs help companies take advantage of the lower interest rates in international markets, the cost of hedging the currency risk can be significant.
5. The Exchange risk is assumed by the investor and not the issuer in the Masala Bonds, this helps in hedging and provides stability in terms of principal and interest calculation.

Why are Masala bonds special:

1. Masala bonds derive its name from India’s culture and cuisine.
2. Unlike dollar bonds, where the borrower takes the currency risk, masala bond makes the investors bear the risk
3. Masala bonds are first of its kind which recognizes Rupee as internationally tradable asset.
4. Masala bonds showcases the strength of Indian Rupee in international market.
5. With this, Indian Rupee, just like other 5 standard basket of currencies, will be an alternate investment option for companies.
6. Companies issuing masala bonds do not have to worry about rupee depreciation, which is usually a big worry while raising money in overseas markets. If the rupee weakens by the time the bonds come up for redemption, the borrower (company) will need to shell out more rupees to repay the dollars.
7. Masala bonds are a good idea to shield corporate balance sheets from exchange rate risks. But they are best used in moderation, as too much reliance on external debt will not be good for the economy.

Best answer: Oolong slayer IPS

MASALA BONDS

– The term is used to refer to rupee-denominated borrowings by Indian entities in overseas markets.

– The International Finance Corporation, the investment arm of the World Bank, last November, issued a ?1,000 crore bond to fund infrastructure projects in India.

– These bonds were listed on the London Stock Exchange.

– IFC then named them Masala bonds to give a local flavor by calling to mind Indian culture and cuisine.

WHAT MAKES MASALA BONDS SPECIAL

– Masala bonds can have implications for the rupee, interest rates and the economy as a whole.

– If Masala bonds are eagerly lapped up by overseas investors, this can help prop up the rupee.

– Rupee-denominated bonds issued overseas can become an important instrument from the point of view of Indian companies which can raise such funds from global markets without taking on the currency risk

– With talks of a full rupee convertibility back home, Masala bonds can help the rupee go global.

But these bonds can have bad after-effects too if companies decide to binge on them. With our economy still on shaky ground, too much reliance on external debt can weigh heavily on our rating by global agencies. Masala bonds are a good idea to shield corporate balance sheets from exchange rate risks. But they are best used in moderation. The after-effects of too much masala are not pleasant.

5. Railway tracks in India are often sabotaged and damaged leading to accidents and deaths. What steps can be taken to address this problem. How can we make our rail journey safer? Analyse.

Steps needed for reducing railway accidents:

1. Strict auditing regarding the integrity of tracks need to be carried out regularly.
2. Ultra sound fault detection machines used for precise fault detection need to be expeditiously installed.
3. Strict legal action should be taken against employees for allowing trains to be loaded heavily beyond the prescribed limits.
4. Need to ensure materials used in the construction of tracks are of high quality. Strict auditing of signaling and integrity of tracks.
5. Use LHB coaches in place of the ICF coaches so that even if derailments occur due to sabotaged tracks, casualties are minimized.
6. The customization to Indian conditions of foreign technologies like Anti-Collision Device and the Train Protection and Warning System
7. A time-bound filling up of vacancies in Critical Safety Categories and Manpower Planning Issues, addresses the demand by railway unions.
8. Prioritizing the completion on Sethu-Bharatam project, so that unmanned railway crossings are eliminated.

Best answer: Aleesha Mary Joseph

The recent Indore rail accident once again brings the faults with Indian railway tracks to limelight. Most of the accidents due to faults in railway tracks occur when heavy load trains are allowed to pass by UNATTENDED micro fractures .

Hence the following steps need to be taken:-

• Strict auditing regarding the integrity of tracks need to be carried out regularly.
• Ultra sound fault detection machines used for precise fault detection need to be expeditiously installed.
• Strict legal action should be taken against employees for allowing trains to be loaded heavily beyond the prescribed limits.
• Need to ensure materials used in the construction of tracks are of high quality. Strict auditing of signalling and integrity of tracks
• Use LHB coaches so that even if derailments occur due to sabotaged tracks, casualties are minimised.

Further at an individual level following precautions could be taken to make rail journey safer:-

• Take individual responsibility to not to board an overcrowded train.
• Instant reporting of anything suspicious that one notice regarding safety measures in the trains or tracks to authorities.
• Abide by the rules like not to stand near the train doors, trying board or de-board a moving train.
• Contribute to railway fund by not skipping to take platform tickets.

Thus although government has increased attention to rail safety by introduction of measures like rail suraksha fund, as users we could also take individual steps to ensure safe journey.