Rise in infrastructure development and automotive production are driving growth in the metals and mining sector in India. India has a vast mineral potential with mining leases granted for a longer duration of 50 years. As of FY21, the number of reporting mines in India were estimated at 1,229, of which reporting mines for metallic minerals were estimated at 545 and non-metallic minerals at 684.
India is expected to overtake Australia and the US in early 2020 to be the world’s second-largest coal producer.
India holds a fair advantage in cost of production and conversion cost of steel and alumina. India became the world’s second-largest crude steel producer in 2019 with production at 111.2 MT. Crude steel production and finished steel production stood at 108.5 MT and 101.03 MT, respectively, in FY20. In FY20, India had a total number of 914 steel plants producing crude steel. In FY21, India’s crude steel production stood at 102.49 million tonnes. In April 2021, production of hot metal, crude steel and saleable steel by SAIL stood at 1.371 MT, 1.230 MT and 1.256 MT, respectively.
According to worldsteel, crude steel output in India registered a 46.9% YoY growth to reach 9.2 million tonnes in May 2021, as compared with 5.8 million tonnes of crude steel output registered in May 2020.
India is the world's second-largest coal producer as of 2021.
India is the world's second-largest crude steel producer, as of 2020, with an output of 99.6 MT.
In FY21, production of key minerals increased YoY—Zinc Conc. (18%; 1,648.00 thousand tonnes), Lead Conc. (15%; 405.47 thousand tonnes), Sillimanite (32%; 17.52 thousand tonnes) and Garnet (abrasive) (107%; 1.14 thousand tonnes).
In May 2021, exports of mica, coal & other ores and minerals, including processed minerals, stood at US$ 389.97 million, compared with US$ 220.24 million in May 2020.
Coal production in the country stood at 715.95 million tonnes (MT) in FY21. In April 2021, coal production stood at 516 lakh tonnes.
In July 2021, India shipped its first coal export to Rampal Power Plant in Bangladesh, giving a boost to the country’s coal exports.
According to official data, in the first quarter of FY22, iron ore exports reached US$ 1.7 billion, registering an increase of 168% YoY.
Iron ore production in the country stood at 189 million tonnes in FY21. In May 2021, iron ore exports stood at US$ 574.56 million, compared with US$ 457.05 million in May 2020.
To increase availability of iron ore in India, the government took several initiatives, such as ‘Mining and Mineral Policy’ reforms, to ramp up production and maximum capacity utilisation by government mining companies. For example, SAIL, with the approval to sell 25% fresh fines and 70 MT dumps and tailings, accelerated sale of iron ore.
Demand for metal and metal products is rising in the domestic market, with India focusing to expand its domestic manufacturing.
The steel production in India is registering strong growth on the back of firms (such as Tata Steel) commissioning new projects.
In July 2021, JSW Steel announced that the company registered a 62% YoY surge in crude steel production at 4.93 million tonnes in the first quarter of FY22.
In July 2021, Power Mech Projects Ltd. secured a contract worth Rs. 9,294 crore (US$ 1.25 billion) from Central Coalfields Ltd. (CCL) to build and operate a mine.
In May 2021, ArcelorMittal Nippon Steel (AMNS) signed a contract with Total (a France-based energy company) for supply of up to 500,000 tons of liquefied natural gas (LNG) per year until 2026.
To improve its business operations amid the pandemic, in May 2021, companies such as Vedanta Aluminium and Bharat Aluminium Company (BALCO) leveraged smart technologies—such as digital smelter solution for human-less monitoring of operations, advanced data analytics for predictive and prescriptive analytics, vision analytics for identification of hot spots in ICTs network to improve asset reliability—to boost production.
In June 2021, the Union Cabinet, chaired by the Prime Minister Mr. Narendra Modi approved the memorandum of understanding (MoU) to be signed between the Ministry of Mines and the Secretariat of Mining Policy of the Ministry of Productive Development of the Argentine Republic. The MoU will provide an institutional mechanism for cooperation in the field of mineral resources.
In April 2021, National Aluminium Company Ltd. was granted the mining lease of Utkal-E coal block in Odisha.
In April 2021, Coal India Ltd. (CIL) announced the incorporation of two wholly owned subsidiaries —CIL Solar PV Ltd and CIL Navikarniya Urja Ltd.
In March 2021, Coal India Ltd. (CIL) approved 32 new coal mining projects, of which 24 are expansion of the existing projects and the remaining are greenfield. Estimated cost of the project is Rs. 47,000 crore (US$ 6.47 billion).
In February 2021, two new iron ore mines were inaugurated in Odisha, with a production capacity of 15 lakh tonnes per month and ~275 million tonnes of consolidated iron ore reserves. These mines will bring in ~Rs. 5000 crore (US$ 679.28 million) in annual revenue for the state and employment opportunities for locals.
In February 2021, CIL signed a contract with Belaz, a Belarus-based mining equipment manufacturer, for procurement of dumpers with an investment amount worth Rs. 2,900 crore (US$ 393.98 million).
In February 2021, CIL also announced plans to invest Rs. 1.43 lakh crore (US$ 19.43 billion) in 20 sir projects, including solar, thermal and aluminum projects.
In July 2021, the Odisha government approved five key industrial projects worth Rs. 1.46 lakh crore (US$ 19.60 billion) that are expected to boost capacity of steel production by 27.5 million tonnes.
Government of India has allowed 100% Foreign Direct Investment (FDI) in the mining sector and exploration of metal and non-metal ores under the automatic route, which will propel growth in the sector. Power and cement industries also aiding growth in the metals and mining sector. Given the strong growth expectations from residential and commercial building industry, demand for iron and steel is set to grow.
From April 2000 to March 2020, FDI inflows in the metallurgical industry stood at US$ 14,742.25 million, followed by the mining (US$ 2,899.84 million), diamond & gold ornaments (US$ 1,190.83 million) and coal production (US$ 27.73 million) industries.
In Union Budget 2021, the government reduced customs duty to 7.5% on semis, flat and long products of non-alloy, alloy and stainless steels to provide relief to MSMEs.
To boost recycling of copper in India, the government announced reduction of import duty on copper scrap from 5% to 2.5% in the Union Budget 2021.
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