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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 has a significant cost advantage in the steel and alumina industries regarding production and conversion costs. In addition, its strategic location facilitates the development of exports as well as the fast-growing Asian markets.

In 2019-20, India had 1,303 mines that reported mineral output (excluding atomic, fuel, and minor minerals) and produced 95 minerals: four fuel-related minerals, ten metallic minerals, 23 non-metallic minerals, three atomic minerals, and 55 minor minerals.

India is the world's second-largest coal producer. Coal consumption / accurate supply (including imports) grew from 836.93 million tonnes in 2016-17 to 968.03 million tonnes in 2018-19.

In 2040, coal is expected to be India's most significant single source of electricity.

India is the world's second-largest crude steel producer, with a 2020 output of 99.6 MT.

India ranks fourth in iron ore production globally, and iron ore production in the fiscal year 2019 (up to Feb 19) stood at 187.60 million tonnes. The country accounts for 8 percent 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, value addition, and integrated activities under government routes.

300 MT

Domestic steel production capacity by 2030
17 Bn (USD)

FDI equity inflows to metallurgical industries and mining (Apr 2000 - June 2022)
27.73 Mn (USD)

FDI equity inflows to coal production (Apr 2000 - March 2022)

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

In FY21, the country produced 715.95 million tonnes (MT) of coal.
In FY21, the country produced 189 million tonnes of iron ore.
India has a total of 914 steel factories manufacturing crude steel in FY20. In FY21, India produced 102.49 million tonnes of crude steel.
In FY20, aluminum production totaled 3.65 MT. In terms of value, the country's aluminum exports totaled US$ 20.18 million in FY20.
Due to reforms such as the Make in India Campaign, Smart Cities, Rural Electrification, and a focus on building renewable energy projects under the National Electricity Policy, as well as increased infrastructure development, India's metals and mining sector is expected to undergo significant transformation in the coming years.
In 2020, 19 coal blocks will be auctioned for commercial mining. With a combined peak capacity of 51 MPTA, these mines are estimated to generate over INR 7,000 crore in income.
In March 2021, the second tranche of the commercial coal mining auction offered 67 mines for sale.

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

July 2021- Coal India (CIL) has agreed to pay almost INR 1,462 crore for 11 Russian rope shovels.
June 2021- Steel companies have committed to investing INR 60,000 crore over the next three years.
May 2021- ArcelorMittal Nippon Steel India has started a feasibility study with the Odisha government to propose a 12 million tpa integrated steel plant in the state's Kendrapara area.
April 2021- Vedanta Group plans to build a new copper smelter plant in the country's coastline region for roughly INR 10,000 crore.
January 2021- By the financial year 2027-28, NALCO plans to invest INR 30000 crores in expansion.

6X Growth in FDI equity inflows in the mining sector for the three years 2014-17 viz-a-viz 2011-14
$27.7 mn FDI in coal production during April 2000 – June 2021
$2.89 bn FDI in coal mining inflow during April 2000 – March 2021