Mining and Metals
Overview of the Sector
The mining and metals sector is a foundational pillar of India’s industrial growth, supporting key industries such as infrastructure, construction, manufacturing, power, and automotive. The sector includes the exploration, extraction, processing, and distribution of minerals and metals such as coal, iron ore, bauxite, copper, zinc, limestone, and steel.
India is rich in mineral resources and ranks among the top producers of several key minerals globally. The government’s push for self-reliance through initiatives like “Atmanirbhar Bharat,” the National Mineral Policy, and commercial coal mining reforms has opened the sector to greater private participation and investment. Infrastructure development, renewable energy expansion, and rising steel demand are driving sustained growth in this industry.
The sector is also undergoing modernization with the adoption of automation, digitization, and sustainable mining practices. Environmental, Social, and Governance (ESG) compliance is gaining importance, especially for companies with global linkages or foreign investments.
Despite its potential, the sector faces challenges in areas such as royalty payments, mine closure obligations, environmental clearances, and cost management. From a financial and audit perspective, accurate tracking of production volumes, inventory, statutory levies, and capital-intensive project costs is critical for compliance and operational efficiency.
Effective financial controls, internal audits, and adherence to mining regulations are essential to maintain transparency and build stakeholder confidence, especially in a highly regulated and resource-sensitive environment.
As India continues to invest in infrastructure and manufacturing, the mining and metals sector will remain central to meeting the country’s long-term economic and developmental goals.
The mining and metal industry operates within a highly regulated, capital-intensive, and environmentally sensitive framework. Entities engaged in exploration, extraction, beneficiation, processing, and trading of minerals and metals must manage complex value chains, high-value fixed assets, and significant statutory obligations. In this context, auditing plays a critical role in ensuring financial accuracy, regulatory compliance, and operational governance.
Financial complexities in the sector arise from the long-term nature of mining leases, upfront capital expenditure, site restoration obligations, and the volatility of commodity prices. Accurate revenue recognition requires robust tracking of production volumes, ore grades, and inventory movement from mines to processing units and sales depots. Depletion and amortization of mineral reserves, valuation of closing stock (including work-in-progress and finished metals), and recognition of royalty, dead rent, and profit-sharing with state governments demand precise financial treatment.
Audit procedures are further complicated by the sector’s operational dispersion, heavy reliance on third-party contractors, and usage of integrated ERP and mine planning systems. Internal audits must evaluate adherence to mine development plans, environmental compliance, cost overruns in project execution, and procurement integrity. Asset audits are particularly critical due to the high value and specialized nature of mining equipment, beneficiation plants, and infrastructure.
Entities are also subject to stringent regulatory oversight under the Mines and Minerals (Development and Regulation) Act, Environment Protection Act, Mineral Concession Rules, GST, Income Tax Act (including Section 115JB for MAT), and state-specific mining laws. Transfer pricing audits may apply for MNCs engaged in cross-border mineral trade.
In an industry with high operational, financial, and compliance risks, an effective audit framework ensures not only statutory conformity and financial transparency but also supports sustainable resource management, risk mitigation, and stakeholder confidence.
The mining and metals industry is capital-intensive, heavily regulated, and subject to significant environmental and operational scrutiny. At P. Srinivasan & Co., we offer specialized audit services tailored to mining companies, metal processors, and mineral trading entities. Our audits focus on key financial areas such as accurate tracking of production volumes, ore grading, inventory valuation, cost allocation across exploration, extraction, and processing, and the correct recognition of revenue in line with Ind AS and industry-specific guidance.
We assess capital expenditure related to mine development, plant and machinery, and infrastructure, while verifying asset capitalization, depreciation, and site restoration provisions. Our team also evaluates royalty and lease payments, dead rent, and other statutory levies payable under the Mines and Minerals (Development and Regulation) Act, along with GST and income tax obligations relevant to the sector.
Given the industry’s operational scale and reliance on subcontractors and third-party logistics, our internal audits examine procurement practices, inventory controls, contractor payments, logistics reconciliation, and environmental compliance reporting. For companies operating across multiple states or countries, we assist in branch accounting, inter-company reconciliations, and transfer pricing documentation related to mineral exports.
We also review adherence to sustainability reporting standards and ESG disclosures, increasingly important in today’s global metals markets. With a deep understanding of sector-specific risks and financial intricacies, P. Srinivasan & Co. delivers audit solutions that enhance transparency, ensure regulatory compliance, and support responsible resource management — enabling long-term operational and financial stability.
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Systems & process setup & implementation
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Tax advisory
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Authenticating Records
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Mergers & Acquisitions
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