Indian Metals and Mining Industry Analysis

Rise in infrastructure development and automotive production are driving growth in the metals and mining sector in India. India has vast mineral potential with mining leases granted for longer durations of 20 to 30 years. India produces 95 minerals– 4 fuel-related minerals, 10 metallic minerals, 23 non-metallic minerals, 3 atomic minerals and 55 minor minerals (including building and other minerals).

Mineral production in India grew at a CAGR of 5.72 per cent between 2013-14 and 2017-18E to reach US$ 17.62 billion in 2017-18.

India holds a fair advantage in cost of production and conversion costs in steel and alumina. The country is the 3rd largest steel producer with production of 101.4 million tonnes of crude steel in 2017. Crude Steel and Finished Steel production during 2017-18 was 103.13 million tonnes and 104.98 million tonnes respectively. India is the largest producer of sheet mica in the world and has the 7th largest bauxite reserves at around 2,908.85 million tonnes in FY17. Iron ore production in the country increased from 129.32 million tonnes in FY15 to 200.96 million tonnes in FY18. It is forecasted to grow at the rate of 5 per cent in FY19. During April-December 2018, exports of iron and steel stood at US$ 7.21 billion.

The Government of India has allowed 100 per cent 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. Demand for iron and steel is set to grow, given the strong growth expectations for the residential and commercial building industry. By March 2019, 105 mineral blocks are expected to be auctioned.