India has the fifth-largest coal reserves in the world at 60.6 billion tonnes; production of coal stood at 540 million tonnes (MT) and 557.7 MT in FY 12 and FY 13, respectively. Also, the country ranks fourth globally in terms of iron ore production; in FY 13, India produced 135.8 MT of iron ore. India’s metal and mining industry stood at US$ 141.9 billion in 2011 and is expected to touch US$ 305.5 billion by 2015.
The industry recorded a strong 19.8 per cent expansion in 2011 to touch US$ 141.9 billion. Production volumes have also been growing steadily over the years – in the period 2007–11, it registered a compound annual growth rate (CAGR) of 5.2 per cent; with prices also rising during this period, the sector’s value rose at a CAGR of around 17.7 per cent.
The Government of India’s role in the industry’s growth is significant. It has relaxed foreign direct investment (FDI) norms, allowed private ownership and reduced customs duty. As a result, FDI has increased and the value of merger and acquisition (M&A) deals in the industry rose at a CAGR of 138 per cent over 2008–11.
Strong long-term demand from the steel industry is expected to further boost the iron ore industry, and increasing power production is likely to catapult demand for coal. Furthermore, booming construction, automobiles, and packaging industries are expected to lend substantial support to the metals and mining sector.