|
|
 |
|
Viewing report
|
|
|
|
India Mining Report Q1 2009
Business Monitor International, March 2009, Pages: 250
India Mining Report provides industry professionals and strategists, corporate analysts, mining associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on India's mining industry.
India is home to a myriad of metals and minerals. Globally, the country is the largest producer of sheet mica, the third largest producer of coal, the fourth largest producer of iron ore and the fifth largest producer of bauxite. Besides these natural resources, India also hosts significant reserves of copper, zinc, gold and about 26 other metallic and minor minerals. The Indian mining sector is largely state-dominated, but the government is now seeking a phased withdrawal of its participation from the non-strategic metal sector in order to encourage private players to take the centre stage.
However, the financial crisis is impacting the mining sector with output dropping. Indian state-owned iron ore miner, National Mineral Development Corp. (NMDC), has announced that output could drop in the 2008/2009 financial year due to falling demand from the steel sector, as reported by Reuters. Both the construction and automobile industries – both large consumers of steel – have been in difficulties in recent months and the effects are being felt all the way down the supply chain. NMDC is hoping to produce 29.8mn tonnes of iron ore, which would equal output levels in 2007/2008. However, this is under the initial forecast of 32mn that the company made for the year. Sales are being propped up by a mixture of long-term contracts, a recent 25% price reduction and the withdrawal of export duty on iron ore.
Meanwhile, in January 2009, Reuters reported that India has suffered a 47% drop in gold imports in 2008. India is the world’s largest importer of gold, however, weakness in the economy and the high price of gold – which is often seen as a safe haven in times of economic crisis – has resulted in falling demand. Meanwhile, local factors also played a part with the Bombay Bullion Association (BBA) claiming that a large drop in gold imports in December 2008 was partly because there were not many marriages or festivals, while the terrorist attacks in Mumbai had also impacted demand. In 2008, gold imports stood at 402 tonnes compared to 759 tonnes in 2007. By the end of 2008, in contrast to most other commodities, gold prices were up by almost 30% on the year.
India’s economic prospects and rich geology have long captured the interest of foreign companies.
However, there is only a small presence of foreign mining firms whose investments would help upgrade the Indian mining-related technology. A new and much anticipated mining policy is on the horizon. It seeks to ease excessive bureaucratic influences while issuing or transferring mining leases and permits. The policy also aims to encourage domestic and overseas players to invest in the exploration of precious metals. In addition, the government is taking active steps to encourage foreign investment in the mining industry, with the investment target for 2007-2009 pegged at US$22.37bn.
Non-uniformity of rules and regulations across the country characterises Indian mining laws. The states hold the sole licensing authority for most minerals, except for iron ore and uranium, which require prior consent from the central government. States can also create their own qualifying conditions and most of them hold discretionary powers to terminate a mining lease, or to take ownership of a mine on grounds of non-performance, or environmental or labour-related reasons.
In a positive move for the sector, in March 2008, the Indian cabinet approved the National Mineral Policy (NMP) 2008, which should do much to boost foreign direct investment (FDI) in mining. At the same time, the cabinet also approved the setting-up of an independent dispute resolution tribunal to be known as the Mining Administrative Appellate Tribunal. It is believed that the approval of the NMP will be a clear boon for the sector.
Industry Forecast
The global financial crisis is having an impact on India’s industrial sector. Export growth dropped sharply in November 2008 to -12.2% from 10.4% y-o-y in the preceding month, as Indian exporters faced a sharp decline in demand from overseas buyers. A number of companies have since reined in their production plans as export orders have plunged.
However, despite falling commodity prices, India’s mining sector is continuing to post strong growth driven by strong domestic demand. Between 2008-2013, forecasts predict that the sector will grow by a compound annual growth rate of 9.75% reaching a total value of US$47.12bn. This represents 2.6% of GDP, however, the country is still not exploiting its true potential and needs to improve productivity and invest in exploration and infrastructure.
Product samples
A sample for this product is available. Please Login/Register to download this sample.
Customers who bought this item also bought
India Mining Report Q2 2009
India Mining Report Q3 2009
Indian Mining & Exploration 2008
India Mining Report Q4 2009
China Industry Research and Investment Analysis: Iron Ore Mining Industry 2008
China industry research and investment analysis: iron ore mining industry, 2008
Malaysia Mining Report 2009
Brazil Mining Report Q2 2009
Brazil Mining Report Q1 2009
China Mining Report Q1 2009
Romania Mining Report 2009
Mining in India 2007
|
|
|
|
