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Mining the future

The Indian mining sector was valued at USD 41.7 bn in 2014-15 and is estimated to reach USD 126 bn by 2025. The sector contributed about 2.6% of the Gross Value Added (GVA) in 2015-16.

The total mineral production (excluding atomic minerals) during 2014-15 has been estimated at USD 40.9 bn. Fuel minerals account for 64%, metallic minerals 14%, non-metallic minerals 3% and minor minerals 19% of the total value.

100% FDI allowed in mining and exploration of metal and non-metal ores under automatic route

100% FDI allowed in mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities under government route

for more details, FDI Policy 2017

HIGHLIGHTS

  • Third largest coal & steel producer in the world
  • Fourth largest iron ore producer in the world
  • Fifth largest bauxite reserves in the world

Industry Scenario

With barely 20% of reserves mined, India presents a major opportunity for investors.

India has significantly large resources of iron ore, bauxite, chromium, manganese ore, baryte, rare earths and mineral salts. India produces as many as 90 minerals that include 4 fuel minerals, 5 atomic minerals, 10 metallic and 71 non-metallic minerals. In 2014-15, there were more than 3,318 reported mines including coal & lignite (excluding atomic minerals, petroleum (crude), natural gas (utilised) and minor minerals.

Out of 3318 reporting mines, 498 were located in Rajasthan followed by Andhra Pradesh (444), Gujarat (362), Madhya Pradesh (326), Tamil Nadu(272), Jharkhand (250), Chhattisgarh (201), Karnataka (178), Odisha (173), Maharashtra (150), Telangana (145) and West Bengal (120). 

These 12 states together accounted for 94% of the total number of mines in the country in 2014-15. Among them, 575 mines belonged to coal & lignite, 595 to metallic minerals and 2,148 to non-metallic minerals.

Growth Drivers

Mining GD
  • Coal production share (global)

    11%

  • Petcoke imports growth (FY17)

    39.8%

  • Mineral production index

    127.2

  • Crude steel production share (global)

    5.5%

Key policies

National Mineral Exploration policy, 2016

The National Mineral Exploration Policy (NMEP) document spells out the strategy and outlines the action plan that the Government will adopt to ensure comprehensive exploration of country’s mineral resources (non-fuel and non-coal). Successful exploration requires the bringing together of the best of knowledge and experience, the state-of-the-art technology, highly trained manpower, and also enormous financial resources, on an open, collaborative and inter disciplinary platform. The major portion of the effort is clearly of the public good character.
 

National Steel Policy

The new Steel Policy enshrines the long term vision of the Government to give impetus to the steel sector.  It seeks to enhance domestic steel consumption and ensure high quality steel production and create a technologically advanced and globally competitive steel industry.

Key features of the NSP 2017:

1.      Create self-sufficiency in steel production by providing policy support & guidance to private manufacturers, MSME steel producers, CPSEs

2.      Encourage adequate capacity additions,

3.      Development of globally competitive steel manufacturing capabilities,

4.      Cost-efficient production

5.      Domestic availability of iron ore, coking coal & natural gas,

6.      Facilitating foreign investment                  

7.      Asset acquisitions of raw materials &

8.      Enhancing the domestic steel demand.

Mines and Mineral Development and Regulation Act

An Act to provide for the development and regulation of mines and minerals under the control of the Union.
 

National Mineral Exploration Trust (NMET)

Realising the need to increase the spend on the exploration activity that would facilitate high growth in the mining sector, GoI has created NMET. NMET will give a fillip to the exploration in the country by undertaking large scale exploration projects.
 

FDI Facts

  • Growth in FDI for the 3 years period 2014-17 viz-a-viz 2011-14

  • FDI (in USD) in mining inflow during Apr 2000-Jun 2017

  • FDI (in USD) in coal production

Recent Investments

  • August 2017 - Adani Enterprises Ltd announced that it is ready to start work on the USD 16.5 bn Carmichael mine. The project is expected to commence production in FY 2020-21 with an output of 25 mn tonnes in the first phase.

  • June 2017 - JSW Steel proposed constructing a slurry pipeline project to transport iron ore and coal at competitive prices in Karnataka with an investment of USD 3.3 bn . JSW Steel is currently operating a 12-MMTPA integrated steel plant in the area.

  • March 2017 - Hindustan Zinc announced that it will set up its first Zinc Fumer Plant in Rajasthan by 2018 with an investment of USD 83.2 mn . This plant will extract metals from waste and will have an annual production capacity of 3,000 tonnes.

  • March 2017 - Mangal Credit and Fincorp announced plans of diversifying in iron ore mining by acquiring a mine near Goa. The 21 ha mine consists of iron ore reserve worth USD 223.1 mn .

Major Investors