Introduction
India holds a fair advantage in production and conversion costs in steel and alumina. Its strategic location enables export opportunities to develop as well as fast-developing Asian markets.
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).
Rise in infrastructure development and automotive production are driving growth. Power and cement industries are also aiding growth for the sector. Demand for iron and steel is set to continue given the strong growth expectations for the residential and commercial building industry.
Investments/ Developments
- State Bank of India (SBI) is planning to introduce a policy to lend loans to the coal miners before the landmark auction.
- For FY20, JSW Steel set a target of supplying around 1.5 lakh tonne of TMT Rebars to metro rail projects across the country.
- In October 2019, Kamdhenu Ltd added new production capacity of 60,000 tonne per annum in Dadri, Uttar Pradesh to manufacture Kamdhenu Structural Steel.
- India’s iron and steel export in FY20 stood at US$ 9.28 billion.
- During April 2000–March 2020, Foreign Direct Investment (FDI) in metallurgical industries stood at US$ 13,401.78 million. During the same period, FDI inflow in mining, diamond and gold ornaments and coal production sectors stood at US$ 2,731.07 million, US$ 1,177.60 million and US$ 27.73 million, respectively.
Government Initiatives
- Government introduced Mineral Laws (Amendment) Bill, 2020, to open a new era in Indian coal & mining sector, especially to promote “ease of doing business”.
- Government introduced National Infrastructure Pipeline in 2019 with plans to invest Rs 100 lakh crore (US$ 1.43 trillion) over the next five years.
- The Ministry of Steel aims to increase the steel production capacity to 300 million tonnes by 2030–31 from 134.6 million tonnes in 2017–2018, indicating new opportunities in the sector.
- Under the Mines and Minerals (Development and Regulation) Act of 1957, FDI up to 100% under the automatic route is allowed for mining and exploration of metal and non-metal ores including diamond, gold, silver and precious ores, while FDI up to 100% under the Government route is allowed in mining and mineral separation of titanium bearing minerals and their ores.
- National Mineral Policy 2019 was launched for transparency, better regulation and enforcement and balanced socio-economic growth of the sector.
- In July 2018, Union Minister of Coal, Railways, Finance & Corporate Affairs launched a mobile application, ‘Khan Prahari’ and Coal Mine Surveillance & Management System (CMSMS), developed by Central Mine Planning and Design Institute (CMPDI).
Achievements
Following are the achievements of the Government in the past year:
- The index of mineral production was 132.7 in March 2020.
- Mining group under Index of Industrial Production (IIP) stood at 109.7 for FY20, witnessing a growth of 1.7% y-o-y.
Road Ahead
There is a significant scope for new mining capacities in iron ore, bauxite and coal and considerable opportunities for future discoveries of sub-surface deposits.
Infrastructure projects continue to provide lucrative business opportunities for steel, zinc, and aluminium producers.
Iron and steel make up a core component for the real estate sector. Demand for these metals is set to continue given strong growth expectations for the residential and commercial building industry.
Note: Conversion rate used in April 2020, Rs 1 = US$ 0.013123
References: Media Reports, Press Information Bureau (PIB), Union Budget 2020–21
