Released July 14, 2008 | BANGALORE, INDIA
en
Researched by Industrial Info Resources (Sugar Land, Texas)--India's mining industry is looking to attract investments of about $22.4 billion by 2009 from international mining and exploration giants and financial investors. The market for mining and mineral-processing equipment in India is estimated at $5 billion for the next five years. The sector is growing at an annual rate of 4.9% and is poised for growth at a rate of 8% to 9% in 2008-12. Growth in this sector is expected to be sustained by several factors, including a projected shortfall in the supply of coal, intense competition spurred by privatization of the sector, and the pressing need for the replacement of outdated technologies and obsolete processes.
More than 80% of India's mining activities are in the coal sector. Demand for coal is expected to be 800 million tons per year by 2011. It is estimated that $21 billion will be required for opencast mining and an additional investment of $5 billion will be required for underground mining. More than $30 billion to $40 billion of investment opportunities are likely to be generated over the next decade in the exploration and development of new coal mines, the manufacture of mining equipment, the development of modern technology, and the creation of requisite infrastructure for the off-take of mined coal.
State-owned Coal India Limited (CIL) (Kolkata, West Bengal), which currently mines more than 80% of India's coal deposits, and its eight subsidiaries are the largest users of coal-mining equipment in India. State-owned Neyveli Lignite Corporation (Neyveli, Tamil Nadu) and Singareni Collieries Company Limited (Khammam, Andhra Pradesh) are also important buyers of mining equipment. Tata Iron & Steel Company Limited (Jamshedpur, Jharkhand) is a major user of mining equipment for captive coal mines. Power utility companies in the private sector, including CESC Limited (Kolkata), Reliance Power Limited (BOM:532939) (Mumbai) and the Tata Group (Mumbai) are involved in projects to develop, own and operate captive coal mines which makes them significant users of state-of-the-art mining equipment and technology.
With the steeply increasing demand for coal and iron ore in a burgeoning market, India is poised as an attractive investment destination for mining equipment manufacturers worldwide. Metso Minerals, a subsidiary of Metso Corporation (Helsinki, Finland), recently secured an $18 million contract from JSW Steel Limited (BOM:500228) (Mumbai) to supply an iron ore induration machine for JSW's plant in Vijayanagar, Karnataka. It has also secured an $11 million contract from Bharat Mines and Minerals (Bellary, Karnataka) to supply an iron ore beneficiation plant for BNM's mine in Bellary. The orders will be fulfilled by 2010.
In April, Leighton Holdings (ASX:LEI) (New South Wales, Australia) secured a $600 million contract to develop and operate the open-cut Chitarpur coal mine in Jharkhand, Jamshedpur, to produce 115 million tons of coal over 20 years. Leighton will undertake the development of mine infrastructure and the coal handling plant. The plant is likely to start production of 6.75 million tons of coal per year by October 2009 and will cater to the requirements of steel plants. In June, Vedanta Resources PLC (LSE:VED) (London) announced plans to invest $20 billion in India over the next four years of which it will invest $8.8 billion in metals and mining operations.
Caterpillar Incorporated (NYSE:CAT) (Peoria, Illinois) recently announced a strategic plan to invest $200 million over the next four years to ramp up its manufacturing operations in India. Caterpillar will largely invest in its earth-moving equipment manufacturing facility in Tiruvallur near Chennai, Tamil Nadu, to increase the production of off-highway trucks used in mining operations. It is contemplating the addition of a production line in this unit to manufacture dumpers with a capacity of more than 120 tons for the export market.
Foreign direct investment (FDI) in the coal sector is permitted in captive mines. Approval from the Foreign Investment Promotion Board is not required in the case of less than 50% foreign equity. Higher foreign equity requires approval from the board and is subject to end use. In the mining of coal and lignite, foreign investments are allowed to cover 100% of the captive consumption in power generation. The same rule can be applied to coal processing, which includes washing and sizing. India plans to replace the mining policy that was formulated in 1993 to eliminate the stringent provisions that deter investments in this sector. A new policy will be formulated to encourage foreign players to establish joint ventures with local companies. It will also streamline processes to enable the smooth implementation of mining projects by exploration license holders.
View Project Report - 89000582 89001137
Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.
More than 80% of India's mining activities are in the coal sector. Demand for coal is expected to be 800 million tons per year by 2011. It is estimated that $21 billion will be required for opencast mining and an additional investment of $5 billion will be required for underground mining. More than $30 billion to $40 billion of investment opportunities are likely to be generated over the next decade in the exploration and development of new coal mines, the manufacture of mining equipment, the development of modern technology, and the creation of requisite infrastructure for the off-take of mined coal.
State-owned Coal India Limited (CIL) (Kolkata, West Bengal), which currently mines more than 80% of India's coal deposits, and its eight subsidiaries are the largest users of coal-mining equipment in India. State-owned Neyveli Lignite Corporation (Neyveli, Tamil Nadu) and Singareni Collieries Company Limited (Khammam, Andhra Pradesh) are also important buyers of mining equipment. Tata Iron & Steel Company Limited (Jamshedpur, Jharkhand) is a major user of mining equipment for captive coal mines. Power utility companies in the private sector, including CESC Limited (Kolkata), Reliance Power Limited (BOM:532939) (Mumbai) and the Tata Group (Mumbai) are involved in projects to develop, own and operate captive coal mines which makes them significant users of state-of-the-art mining equipment and technology.
With the steeply increasing demand for coal and iron ore in a burgeoning market, India is poised as an attractive investment destination for mining equipment manufacturers worldwide. Metso Minerals, a subsidiary of Metso Corporation (Helsinki, Finland), recently secured an $18 million contract from JSW Steel Limited (BOM:500228) (Mumbai) to supply an iron ore induration machine for JSW's plant in Vijayanagar, Karnataka. It has also secured an $11 million contract from Bharat Mines and Minerals (Bellary, Karnataka) to supply an iron ore beneficiation plant for BNM's mine in Bellary. The orders will be fulfilled by 2010.
In April, Leighton Holdings (ASX:LEI) (New South Wales, Australia) secured a $600 million contract to develop and operate the open-cut Chitarpur coal mine in Jharkhand, Jamshedpur, to produce 115 million tons of coal over 20 years. Leighton will undertake the development of mine infrastructure and the coal handling plant. The plant is likely to start production of 6.75 million tons of coal per year by October 2009 and will cater to the requirements of steel plants. In June, Vedanta Resources PLC (LSE:VED) (London) announced plans to invest $20 billion in India over the next four years of which it will invest $8.8 billion in metals and mining operations.
Caterpillar Incorporated (NYSE:CAT) (Peoria, Illinois) recently announced a strategic plan to invest $200 million over the next four years to ramp up its manufacturing operations in India. Caterpillar will largely invest in its earth-moving equipment manufacturing facility in Tiruvallur near Chennai, Tamil Nadu, to increase the production of off-highway trucks used in mining operations. It is contemplating the addition of a production line in this unit to manufacture dumpers with a capacity of more than 120 tons for the export market.
Foreign direct investment (FDI) in the coal sector is permitted in captive mines. Approval from the Foreign Investment Promotion Board is not required in the case of less than 50% foreign equity. Higher foreign equity requires approval from the board and is subject to end use. In the mining of coal and lignite, foreign investments are allowed to cover 100% of the captive consumption in power generation. The same rule can be applied to coal processing, which includes washing and sizing. India plans to replace the mining policy that was formulated in 1993 to eliminate the stringent provisions that deter investments in this sector. A new policy will be formulated to encourage foreign players to establish joint ventures with local companies. It will also streamline processes to enable the smooth implementation of mining projects by exploration license holders.
View Project Report - 89000582 89001137
Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.
