Despite the richness of the mineral resources the mining industry in the country is not in its good health and is gripped with a number of problems. A brief mention of some of these problems is given below-
1. There is lack of proper policy for the extraction and processing of mineral resources in the country. Except in case of some selected minerals the government has no control over the mining of other minerals. A large number of lessees look upon mines as a quick money making proposition and use unscientific techniques in mining so as to generate huge wastage and cause irreparable damage to the surrounding environment.
2. The technology adopted in mining and processing of minerals is old and obsolete. There are very few expert miners and trained workers. Not only the output is low, wastage is high but the susceptibility of accident and mishap is great. Due to lack of latest technology some of the mines have been abandoned and have been declared uneconomical.
3. The spatial distribution of minerals in the country is not uniform. There is a small area of the country which is rich in mineral resources. As inland waterways have not been developed, the railways have been the chief means of transport. Transport bottleneck, scarcity, higher prices and transport cost are some of the common problems.
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4. Since colonial days the mining industry of the country was oriented towards the export of raw minerals to foreign countries. This practice is not altogether stopped as yet. Consequently minerals fetch low price in international market, and profit arising out of byproducts during processing and its employment generating capacity are automatically lost.
5. Proper exploration of mineral resources of the country and their detailed inventory has not been done. Still there are a number of remote areas in Orissa, Bihar, Jharkhand, Madhya Pradesh, Chhattisgarh and Himalayas where exploratory surveys may yield good results.
6. Until 1963, the mining industry was without any organisation to promote its trade and marketing like the Indian Tea and Coffee Boards. Consequently, there was severe competition for minerals in the country and abroad and prices were non- remunerative. However the situation has slightly improved with the formation of Minerals and Metals Trading Corporation in 1963.
7. Besides mining the mineral industry is plagued with several problems pertaining to capital, infrastructure, marketing, foreign competition and lack of government patronage.
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8. There is very little emphasis on the conservation of the minerals and avoid wastage. Still large quantity of natural gas is flared up in oil mining. Due to lack of research and use of low grade technology low grade minerals are thrown out and a number of by-products remain unutilised.
9. Unscientific exploitation of minerals is associated with robbers’ economy which has adverse impact over the environment. In India less care has been taken to enforce environmental laws over unscrupulous miners. In majority of the cases after the depletion of the minerals miners leave the area without leveling the land and planting new vegetation. Hence, mining areas look like ravine and waste lands.