MINING OF INDIA

BY
ARUN P PRASAD
CONTRIBUTION OF THE PUBLIC SECTOR

 The public sector contributes over 85 percent of the total value of

mineral production.  However, it is the avowed policy of the
Government to withdraw from the non-strategic sectors and accordingly
the public sector undertakings are being privatised in a phased manner.
 Public sector enterprises like the National Mineral Development
Corporation, Kudremukh Iron Ore company, Steel Authority of India
Limited and Orissa Mining Corporation dominate the iron ore sector.
 National Aluminium Company contributes about 35% bauxite mining
and aluminium production.  Hindustan Copper Limited predominates
the copper ore mining sector.
 Coal Mining is predominantly a public sector activity - Coal India Ltd.
(CIL) accounts for 85% of total coal production
A SWOT Analysis of Indian Mining Industry

STRENGTH
 . World's largest producer of mica; third largest producer of coal and lignite &

barytes; ranks among the top producers of iron ore, bauxite, manganese ore and
aluminum. 
 Labours easily available
 Low labour and conversion costs
 Large quantity of high quality reserves
 Exports iron-ore to China and Japan on a large scale
 Strategic location : Proximity to the developed European markets and fast-
developing Asian markets for export of Steel, Aluminium
WEAKNESS
 Coal mining in India is associated with poor employee productivity.
The output per miner per annum in India varies from 150 to 2,650
tones compared to an average of around 12,000  tones in the U.S.
and Australia; and
 Poor infrastructure facilities
 Mining technology is outdated
 Low innovation capabilities
 Labor force is highly un-skilled and inexperienced
 High rate of accidents
 Lack of R&D programs and training and development
 Most of the Indian mining companies do not have access to Indian
capital market
OPPORTUNITIES
 Strengthening of logistics in coal distribution - In India, the logistics
infrastructure such as ports and railways are overburdened and costly and act as
bottlenecks in development of free market. Privatization of ports may bring the
needed efficiencies and capacities.

 Focusing on technology for future - India's numerous technology research

institutes are working on energy related R&D. However, there is a possibility
that they are operating in a fragmented fashion.
THREATS:

 Foreign Investment in the Mining

 Large integrated international metal manufacturers including
POSCO, Mittal Steel and Alcan have announced plans for
expansion in India
 Mining companies and equipment suppliers are under the constant
threat of being taken over by foreign companies.
 A heavy tax burden discourages further investment.
 Politicians undervalue the industry's contributions to the economy.
 Stricter environment rules restricting mining activities
EMERING MINING INDUSTRY
 However, higher economic growth, good quality resources and
growing domestic demand has induced the shifting of mining activity
to emerging economies. Our report provides an insight into India’s
mining industry and how our professionals can address a wide
spectrum of issues, such as:
 Strategy
 Regulatory and tax policy
 Risk management
 Mergers and acquisitions
 Process improvement
 Human capital
 Financial modeling
 Capital raising
 Despite the slowdown, India is still the second-fastest
growing economy, after China.
 Demand for minerals, as well as for mining services, is robust
in the country.
 Mining in India is becoming more structured, and companies
have started outsourcing part of the project to mining service
companies.
 The largest mining company in India, i.e., Coal India Limited
(CIL), plans to invest around INR254 billion during the
Twelfth FYP (2012–17).
 Contract mining could prove to be a solution to the on-going
current coal deficit in country.
 As the industry focuses on adapting international levels of
technology, there exists untapped potential in the Indian
mining equipment sector.
THANK YOU