Indian Mineral Production Dips in July Over June, but Grows 7.49% Year-on-Year for April to July Period

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Researched by Industrial Info Resources (Sugar Land, Texas)--Mineral production from the Indian mining and quarrying sector is reported to have plunged by 2.13% in July this year compared to output in the previous month. However, the mineral sector witnessed a positive growth of 7.49% on a year-on-year basis during the first four months of the current fiscal year, April to July 2009. Production levels in June 2009 registered an increase of 9.93% compared to output in July 2008.

The total value of domestic mineral production, excluding minor and atomic minerals, was pegged at $1.8 billion for the month of July. Coal topped the list in terms of production levels and value, followed by iron ore, petroleum (crude), natural gas (utilized), limestone and lignite in terms of production value. These six minerals accounted for slightly more than 94% of the total value of minerals produced in India in July.

According to data from the Indian Ministry of Mines, the country produces 86 minerals, including four fuels, 10 metallic, 46 non-metallic, three atomic, and 23 minor. In 2008-09, the total provisional value of domestic mineral production, excluding atomic minerals, was estimated at $24.6 billion. Fuel minerals accounted for 62.25% of the total value at $15.5 billion, metallic minerals accounted for 25.17% at $6.2 billion, and non-metallic and minor minerals accounted for 11.84% at $2.9 billion.

The total value of ores and minerals exported in 2007-08 amounted to $20.2 billion, with cut diamond accounting for 60% of the overall exports in terms of value, followed by iron ore at 24.6%, granite at 4.51%, zinc ore and concentrate at 1.35%, chromite at 1.29%, bauxite at 1.24%, and alumina at 1.07%. The total value of ores and minerals imported during this period stood at $74.2 billion, with petroleum (crude) accounting for 73.66% of the total value of imports, followed by uncut diamonds at 8.92%.

The Indian mining sector was opened up to foreign direct investment (FDI) in 1993, and was further liberalized in 1997 when FDI was permitted under the automatic approval route, enabling foreign equity participation of to up to 50% in mining projects and 74% in related services. Since February 2006, the FDI cap has been increased to 100% in exploration and mining of non-atomic and non-fuel minerals, including diamonds and precious stones. The government is considering a revision to the National Mineral Policy to permit FDI in the exploration of capital-intensive minerals such as copper, chromium and nickel. FDI in the Indian mining sector amounted to $6 million in 2005-06, and rose to $42 million and $461 million, respectively, during the next two years. For the April to September 2008 period, FDI in this sector amounted to $92 million.

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