India Mining Industry Update Quarter 4 2011

• Publication date: September 2012
• Report size: 82 pages

India hosts a wide range of globally significant mineral resources, including four fuel minerals (such as coal), 11 metallic minerals (such as iron), 22 minor minerals (such as copper) and 52 non-metallic minerals (such as clay). The country ranks among the world's top five nations for its core competency commodity reserves of coal and iron ore. Iron ore reserves are estimated in the region of 23bn tonnes and account for 6% of global reserves, wh...

India hosts a wide range of globally significant mineral resources, including four fuel minerals (such as coal), 11 metallic minerals (such as iron), 22 minor minerals (such as copper) and 52 non-metallic minerals (such as clay). The country ranks among the world's top five nations for its core competency commodity reserves of coal and iron ore. Iron ore reserves are estimated in the region of 23bn tonnes and account for 6% of global reserves, while coal reserves are reported to be around 255bn tonnes. India is the world's third-largest producer of coal, fourth-largest producer of iron ore and the fifth-largest producer of bauxite. However, only 10% of the country's landmass has been explored due primarily to complicated paperwork, excessive regulations and bureaucratic wrangles.
India's mining market looks set to post average annual growth of 5.1% in real terms from 2011 to 2015 to reach US Dollar 79.6bn at the end of the period, as output of key minerals looks set to grow in the coming quarters and years. However, growth in 2011 and beyond will continue to be curtailed by India's poor operating environment. A bright spot, however, is the increasing number of Indian industry players venturing overseas to secure stable, long-term supplies of minerals such as coal and iron ore in a bid to meet fastrising domestic demand.
India's regulatory environment is prohibitive for the global investor. The present practice in the Indian mining market involves issuing a mining permit/licence contingent on success in the reconnaissance phase. This practice exposes companies to high levels of risk. Moreover, Indian states hold the sole licensing authority for most minerals, leaving aside a few such as iron ore and uranium, which require prior consent from the central government. In spite of best efforts to maintain a degree of uniformity in licensing norms across states, many areas of difference still exist across states.
India's mining segment is highly fragmented, with a large number of small and inefficient mines, many of them illegal. According to Austrade, 95% of operating mines in India produce only about 50% of the country's mineral output. Given the segment 's strategic and economic importance, there is significant government involvement, with the segment dominated by state-owned industry players or Public-Sector Undertakings (PSUs) such as National Aluminium Corp (NALCO), SAIL, National Mineral Development Corp (NMDC) and Coal India. Indeed, according to the USGS, PSUs contribute about 85% of India's total value of mineral production and are the main producers of key commodities such as coal, iron ore, aluminium, copper and gold.

Metal And Mineral Industry in India

Executive Summary 5
Industry SWOT Analysis 6
India Political Environment and Risk Analysis 6
India Economic Environment and Risk Analysis .. 7
India Business Environment SWOT .. 8
World Mining Outlook 9
Rising Taxes Unlikely To Deter Investment .. 9
Recent And Planned Tax Increases . 10
H111 Copper Outlput . 12
Other Developments ... 12
Industry Trends and Developments . 13
Data : India Mining Market Value 14

Environment Overview . 15
Data : Asia Business Environment Ratings . 15
India’s Business Environment 18
Data : BMI Business And Operation Risk Ratings .. 18
Institutions .. 19
Data : BMI Legal Framework Rating . 20
Infrastructure .. 22
Data : Labour Force Quality .. 25
Market Orientation . 26
Data : Asia, Annual Fdi Inflows . 28
Data : Trade And Investment Ratings . 30
Data : Top Export Destinations .. 31
Operational Risk . 32
Political Environment 33

Market Projection s Scenario . 36
Lead: Output Growth to Slow From 2013 as Vedanta Seeks Growth Overseas ... 36
Data : Major Projects . 36
Data : Production Projection 37
Zinc: Growth to Stall After 2012 38
Data : India Zinc Production from 2008 to 2015 39
Iron Ore: Healthy Growth but Exports to Suffer . 40
Data : Key Expansion Plans ... 40
Data : India Iron Ore Production ... 42
Coal: 2011 Production to Suffer Because Of Regulatory Bottlenecks Iron Ore: Healthy Growth but Exports to Suffer .. 43
Data : India Hard Coal Production 44
Bauxite: Production to Increase despite Recent Years' Declines 45
Data : India Bauxite Production . 46
Uranium: Giant Tumalapalli Uranium Mine To Drive Growth .. 47
Data : India Uranium Production .. 48
Regulatory Development ... 49

Competition Overview 52
Data : Mining Market, Fiscal Year Ended March 2010 (US$mn) .. 54
Company Profiles .. 55
Coal India ... 55
Hindustan Copper ... 57
National Mineral Development Corp .. 59
Data : NMDC Key Firms Data (Five-Year Summary) .. 60
Vedanta Resources .. 61
Vedanta Key Firms Data (Five-Year Summary) 62
Commodity Strategy – Metals Update .. 63
Aluminium... 63
Copper 63
Gold 65
Lead 66
Nickel .. 66
Tin... 68
Zinc . 68
World Assumptions, Q4 2011 .. 70
Data : World Assumptions, from 2009 to 2015 .. 71
Data : World And Regional Real Gross Domestic Product Growth, from 2010 to 2013 (% change y-o-y) ... 71
Data : Developed Industry Exchange Rates, from 2010 to 2013 (average) ... 72
Data : Emerging Industry Exchange Rates, from 2010 to 2013 (average) 72
Developed States 73
Data : Developed States’ Real Gross Domestic Product Growth, from 2010 to 2013 (% change y-o-y) 73
Emerging Industries .. 74
Data : Emerging Industries’ Real Gross Domestic Product Growth Projections, from 2010 to 2013 (% change y-o-y) . 75

Environment Overview Ratings Methodology. 76
Data : Mining Business Environment Indicators 77
Data : Weighting Of Components ... 78

Nickel in India

India Nickel Exports, Us$mn, % Change Y-o-y

• $ 250
• Industry data
• February 2013

Yearly, From January 01, 2005 To January 01, 2005
By Business Monitor International
Source: UN Comtrade/BMI Calculation

• Industries : Metal and Mineral
• Countries : India

Metal and Mineral in India

India Ores And Metals, Exports, % Y-o-y

• $ 250
• Industry data
• February 2013

Yearly, From 1996 To 2017
By Business Monitor International
Source: BMI calculation

• Industries : Metal and Mineral
• Countries : India

India Ores And Metals, Imports, % Y-o-y

• $ 250
• Industry data
• February 2013

Yearly, From 1996 To 2017
By Business Monitor International
Source: BMI calculation

• Industries : Metal and Mineral
• Countries : India

India Ores And Metals, Exports, Us$mn

• $ 250
• Industry data
• February 2013

Yearly, From 1995 To 2017
By Business Monitor International
Source: UNCTAD

• Industries : Metal and Mineral
• Countries : India

India Ores And Metals, Imports, Us$mn

• $ 250
• Industry data
• February 2013

Yearly, From 1995 To 2017
By Business Monitor International
Source: UNCTAD

• Industries : Metal and Mineral
• Countries : India

India Mining Industry Value, Inrbn

• $ 250
• Industry data
• February 2013

Yearly, From 2000 To 2017
By Business Monitor International
Source: UN Data/BMI Calculation

• Industries : Metal and Mineral
• Countries : India