New Delhi: The country’s mining industry is projected to touch over $30 billion (Rs1,27,662 crore) accounting for about 2.5% of the GDP in the next four years, a report by financial services firm Edelweiss stated.
“We believe there is strong potential for further development and scaling up of the country’s mining industry,” the report said, adding that this could be achieved if India develops a conducive regulatory framework and attracts significant investment in exploration, mine development and infrastructure.
The report on metals and mining pointed out that India has immense natural resources and is ranked among top 10 globally for deposits in iron ore at 25.2 billion tonnes (BT), coal 257.4 BT and bauxite 3.3 BT, which constitute 3%, 10%, and 4% respectively of the world’s resources.
The country also holds leading positions globally in mica (No 1), barytes (No 2), chromite (No 4), kaolin (No 4), and manganese (No 7), the report said.
“These are significant numbers and imply that India has the potential to develop a scaled up, world class mining industry. Some progress has been made and in iron ore, for instance, India ranks third amongst various exporting countries,” it said.
The report said the proposed National Mineral Policy and the allotment of captive coal blocks (in effect opening up the nationalized coal sector) are key triggers for future development of mining in India.
The ongoing bull run in minerals has created enormous wealth for investors. Market cap of the leading global mining companies has increased at a CAGR of 39% a year from calender year 2001 to 2007, while the corresponding figure for top Indian miners is as much as 139% per annum.
“As the Indian mining industry scales further, we see both new and existing mining players offering significant wealth creation opportunities to investors,” it said.
Major companies in the mining space in the country are Sesa Goa, Adhunik Metaliks, Tata Steel (mainly an end-user), McNally Bharat (MHE) and JSW Steel.
In September 2005, the Hoda Committee under the chairmanship of Anwarul Hoda was constituted to review the National Mineral Policy, 1993, with an aim to improve the investment climate for mining in the country.
Some of the highlights of the Hoda Committee report are: prioritizing critical infrastructure needs of the mining sector, review existing procedures for granting reconnaissance permits, prospecting license, mining lease, identifying ways of augmenting state revenues among others, it added.