Last Updated: February 12, 2018
Last Updated: February, 2018
Metals and Mining Sectoral Report | February, 2018
India holds a fair advantage in cost of production and conversion costs in steel and alumina. Its strategic location enables convenient exports to develop as well as the fast-developing Asian markets.
India currently produces around 88 minerals which mainly include 50 non-metallic, 24 minor, 10 metallic, 4 fuel and 3 atomic minerals.
Rise in infrastructure development and automotive production are driving growth in the sector. Power and cement industries are also aiding growth in the metals and mining sector. Demand for iron and steel is set to continue, given the strong growth expectations for the residential and commercial building industry.
India is the 3rd largest producer of coal. Coal production stood at 554.13 million tonnes in FY17 and 365.6 million tonnes in FY18 (up to November 2017). India has the 5th largest estimated coal reserves in the world, standing at 308.802 billion tonnes in FY16. In 2016, India contributed around 11 per cent of the world’s production of coal.
India ranks 4th in terms of iron ore production globally. In FY17 and April-July 2017, production of iron ore stood at 192 million tonnes and 64.84 million tonnes, respectively. India has around 8 per cent of world’s deposits of iron ore.
India has become the 3rd largest steel producer in FY17 with the production of finished steel at 83.01 million tonnes. India stood as the 3rd largest crude steel producer in 2016, while its production increased to 97.385 million tonnes in FY17 as compared to 90 million tonnes in FY16. Crude steel production from April to November 2017 stood at 66.70 million tonnes.
According to Ministry of Mines, India has the 7th largest bauxite reserves- around 2,908.85 million tonnes in FY17. Aluminium production stood at 1.7 million metric tonnes in FY17.
India has vast mineral potential with mining leases granted for longer durations of 20 to 30 years.
Coal-based power generation capacity in India, which currently stands at 192 GW is expected to reach 330-441 GW by 2040, according to Mr Gopal Singh, CMD, Coal India Limited.
Cumulative FDI inflows into the mining sector between April 2000 and September 2017 stood at US$ 13.79 billion as per Department of Industrial Policy and Promotion (DIPP).
There is significant scope for new mining capacities in iron ore, bauxite and coal and considerable opportunities for future discoveries of sub- surface deposits. In February 2017, the country’s coal ministry allowed private companies to engage into mining activities for commercial purposes.
Infrastructure projects continue to provide lucrative business opportunities for steel, zinc and aluminium producers. India’s infrastructure sector is expected to grow at a CAGR of 35.65% over the period FY 2008-25.
Iron and steel make up a core component of the real estate sector. Demand for these metals is set to continue given strong growth expectations for the residential and commercial building industry.
Exchange Rate Used: INR 1 = US$ 0.015 as on January 4, 2018
References: Media Reports, Press Information Bureau (PIB), Union Budget 2017-18
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
Last Updated: February 12, 2018
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