Business Monitor International


India Mining Report

Published 20 February 2014

  • 98 pages
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$1,295.00
India Mining Report

BMI View: India's mining industry will continue to be characterised by regulatory and bureaucratic hurdles, while corruption will stifle growth in an already poor operating s ector. We forecast the country's mining industry to reach a value of US$ 55.4 bn in 2018 , growing at an average rate of 7.5 % per annum.

Despite the rich deposits of mineral wealth on offer, we believe growth in India's mining industry will remain curtailed by its poor operating environment. We forecast the country's mining industry to reach a value of US$55.4bn in 2018, growing at an average rate of 7.5% per annum. This compares with an average growth rate of 14.3% per annum over the past decade.

India has a wide range of globally significant mineral resources, ranking among the world's top five countries for its core competency commodity reserves of coal and iron ore. Iron ore reserves are estimated in the region of 23bn tonnes (bnt) and account for 6% of global reserves, while coal reserves are reported to be around 286bnt. Indeed, India is the world's third-largest producer of coal, fourth-largest producer of iron ore and the fifth-largest producer of bauxite. However, only 10% of the country's landmass has been explored, due primarily to significant regulatory and bureaucratic hurdles.

Although the 2011 Mines and Mineral Development and Regulation (MMDR) bill seeks to improve transparency and the legislative environment, in order to attract investment, but we believe the pervasiveness of corruption and regulatory and bureaucratic obstacles will continue to prevent mining companies from achieving their full production capacity. In the past mining permits/licences were issued contingent on success in the reconnaissance phase. This exposes firms to high levels of risk. However, the MMDR bill would allow the granting of non-exclusive reconnaissance licences and high-tech reconnaissance/exploration licences based on ability and intention to develop an area. Mining companies would be...

Table of Contents

BMI Industry View
7
SWOT
10
Industry Forecast
11
Bauxite: Dragged By Environmental Woes
11
Table: India - Bauxite Production Forecast
14
Coal: Imports Rising With Production Struggles
14
Table: India - Coal Production Forecast
20
Iron Ore: Hit By Mining Ban
20
Table: India - Select Iron Ore Projects
23
Table: India - Iron Ore Production Forecast
25
Zinc: HZL In Driving Seat
26
Table: India - Largest Zinc Mining Projects
27
Table: India - Zinc Mine Production Forecast
27
Industry Risk Reward Ratings
28
Risk/Reward Ratings
28
Resource Nationalism On The Retreat
28
Frontier Markets Losing Attraction
28
Table: Asia Mining Risk/Reward Ratings
29
Country Highlights
29
Australia: An Improving Landscape
29
China: Darkening Outlook
30
India: Stumbling Blocks Remain, Despite Reforms
30
Indonesia: Further Policy Moderation Ahead
31
Mongolia: Government Unlikely To Overplay Its Hand
31
Philippines: Taxing Times
32
Japan: Little Potential In Sight
33
South Korea: Few Bright Spots
33
Market Overview
35
Table: India - Mining Industry Value And Production Forecasts
37
Regulatory Development
38
Table: Key Changes In Licence/Lease Granting In 2011 MMDR Bill
40
Table: Royalty Rates Under Proposed Mining Bill
40
Table: Political Overview
43
Commodities Forecast
45
Commodity Strategy
45
Aluminium: Continued Short-Term Weakness
48
Copper: Recent Strength Doesn't Change Our View
48
Nickel: Recent Strength To Subside
50
Zinc: Price Momentum To Continue
52
Table: Select Commodities - Performance & BMI Forecasts
54
Competitive Landscape
55
Table: India - Select Listed Mining Companies
57
Company Profile
58
Coal India Ltd (CIL)
58
Table: Coal India Ltd - Key Financial Data
61
Hindustan Copper
62
Table: Hindustan Copper - Key Financial Data
64
NMDC
65
Vedanta Resources
68
Latest Financial Results
70
Table: Vedanta Resources - Key Financial Data
72
Regional Overview
73
Asia Overview
73
Global Industry Overview
81
Methodology
93
Industry Forecast Methodology
93
Sources
94
Risk/Reward Rating Methodology
95
Table: Mining Risk/Reward Ratings Indicators
97
Table: Weighting Of Indicators
98

The India Mining Report has been researched at source and features Business Monitor International (BMI)'s mining and commodity forecasts for metals, minerals and gems, covering all major indicators including reserves, production, exports and values. The report also analyses trends and prospects, national and multinational companies and changes in the regulatory environment.

BMI's India Mining Report provides industry strategists, service companies, company analysts and consultants, government departments, trade associations and regulatory bodies with BMI's independent forecasts and competitive intelligence on the mining industry in India.

Key Benefits

  • Use BMI's independent industry forecasts on India to test other views - a key input for successful budgeting and planning in this mining market.
  • Target business opportunities and risks in India's mining sector through our reviews of latest mining industry trends, regulatory changes and major deals, projects and investments in India.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity), Key Projects Tables and Competitive Landscape Tables.

Coverage

Executive Summary

Summary of BMI's key forecasts and industry analysis, covering mining reserves, supply, demand and prices, plus analysis of landmark company developments and key changes in the regulatory environment.

Business Environment Ratings

BMI's Mining Business Environment Ratings provide a country-comparative Risk-Reward Ratings index aimed at investors (mining companies and support service providers) in the regional mining market. The ratings methodology makes sophisticated use of over 40 industry, economic and demographic data points and is part of BMI's integrated Country Risk-Industry Ratings products.

Key Projects

Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by metal/ore.

BMI Industry Forecasts

Historic data series (2009-2012) and forecasts to end-2017 for all key industry and economic indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast. Indicators include:

  • Mining Industry: Industry size (US$mn), real growth (%), % of GDP, employment ('000), workforce as % of total workforce, average wage (US$).
  • Output:Production volumes ('000 tonnes, carats etc.) for all major metals, minerals, ores and gems mined in each state, including bauxite, copper, gold, coal, lead, silver, tin, titanium, uranium, zinc etc.
  • Exports: Value of exports (US$mn) for all major metals, minerals, ores and gems mined in each state .
  • Commodity Markets: Global demand, supply, stocks and benchmark prices (US$) for aluminium, copper, lead, nickel, tin, zinc, gold and steel.

BMI Macroeconomic Forecasts

BMI forecasts to end-2017 for all headline macroeconomic indicators, including real GDP growth (%), inflation (%), fiscal balance (% of GDP), trade balance (US$bn), current account (US$bn) and external debt (US$bn).

Competitive Landscape Tables & Analysis

Comparative company analyses and tables detailing by US$ sales, % share of total sales, number of employees, year established, market cap/NAV, ownership structure, production and % market share.

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc