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METALS & MINING

FDI In Mining Sectors

One of the core sectors in India, the mining sector provides basic raw materials to many important industries. India holds a fair advantage in cost of production and conversion costs in steel and alumina. Its strategic location enables convenient exports to develop as well as the fast-developing Asian markets. India produces 95 minerals– 4 fuel-related minerals, 10 metallic minerals, 23 non-metallic minerals, 3 atomic minerals and 55 minor minerals (including building and other minerals).

Coal production grew at CAGR 4.6% over FY14-FY19 (to 730.35 MT) and is expected to grow 6-7% Y-o-Y over FY20. 

India ranks fourth in terms of iron ore production globally and production of iron ore in the fiscal year 2019 (up to Feb 19) stood at 187.60 million tonnes. The country accounts to 8 per cent of the world’s deposits of iron ore.

100% FDI in mining in India is allowed under automatic route.

100% FDI in the mining sector in India is allowed in Coal and Lignite under automatic route.

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

 

 

  • 11 %

    Coal producer share

  • 39.8 %

    Petcoke imports growth

  • 131.6

    Mineral imports growth

  • 5.9 %

    India's share in Crude steel production

  • 1

    2nd largest crude steel producer in the world

  • 2

    2nd largest coal producer in the world

  • 3

    4th largest iron ore and aluminium producer in the world

  • India is the 2nd largest producer of coal. Coal production in the country stood at 688.8 million tonnes in FY18. It stood at 576.00 million tonnes during Apr 2018 -Mar 2019
  • India ranks 4th in terms of iron ore production globally. In FY18, production of iron ore stood at 210 million tonnes. India has around 8% of world’s deposits of iron ore
  • According to Ministry of Mines, India has the 7th largest bauxite reserves- around 2,908.85 million tonnes in FY18. Aluminium production stood at 2.25 MT in FY19 (up to February 2019) and is forecasted to grow to 3.33 million tonnes in FY20.
  • Out of 2,101 reported mines, 274 were located in Madhya Pradesh followed by Tamil Nadu (252), Gujarat (225), Jharkhand (211), Chhattisgarh (162), Odisha (157), Karnataka (146), Andhra Pradesh (135), Maharashtra (134), and West Bengal (100). These 10 states together accounted for 85% of the total number of mines in the country in 2015-16. Among them, 558 mines belonged to coal and lignite, 668 to metallic minerals and 975 to non-metallic minerals
  • India became the world’s 2nd largest crude steel producer in 2018 with an output of 106.5 million tonnes
  • Aluminium production stood at 0.92 million metric tonnes during Apr-June 2018 and is forecasted to grow to 3.33 million tonnes in FY20
  • Cost advantage

    Cost advantage in steel and alumina production-conversion
  • Rising demand from infrastructure and transportation sectors

    Schemes such as Housing for all by 2022 and expansion of railway network
  • Unexplored mines

    Only 20% of the total reserves have been mined till now
  • Supportive government policies

    Permission granted to captive mines to sell coal in open market
  • Swiss company IMR Metallurgical is set to invest INR 12,000 cr in the Andhra Pradesh Steel plant.
  • For FY2019-20, JSW Steel set a target of supplying around 1.5 lakh tonne of TMT Rebars to metro rail projects across the country.
  • Feb 2019: ArcelorMittal SA has bid Rs.4,800 crores to acquire Essar's 1200 MW power plant in Madhya Pradesh.
  • Dec 2018: Vedanta Ltd to set up a 4.5 billion tonne steel production plant in Jharkhand at an investment of about $4 bn as part of its newly acquired Electrosteel Steels Ltd. The final production capacity of the plant is expected to be 7 billion tonnes.
  • Nov 2018: Anil Agarwal, Chairman of Vedanta Resources, announced the company’s plan to invest Rs.15, 000 crores to raise the alumina refinery capacity at Lanjigarh in Odisha.
  • Mar 2018: NLC India to invest Rs.1.29 lakh crore to increase mining power capacity

  • 6X Growth in FDI equity inflows in the mining sector for the 3 years period 2014-17 viz-a-viz 2011-14
  • $27.7 mn FDI in Indian mining sector, coal production during April 2000 – June 2019
  • $2.7 bn FDI in coal mining inflow during April 2000 – June 2019

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