India METS Market Briefing
Austmine Webinar May 2016
Tim Martin, Trade Commissioner, Delhi
A Major Opportunity
US$2.3
trillion
economy
World’s 7th
largest
economy
3rd largest
by 2030
Australia’s
5th largest
export
market
Rapidly
expanding
population
of 1.3
billion
Population
median age
is 25
Vital Statistics
• Democratic
• English speaking
• British legal system
• Political capital – New Delhi
• Commercial capital – Mumbai
• Mining capital – Kolkata
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Mining States
% Value Total Production
Source: KPMG “Opportunities in the Mining Sector”, 2016
• Odisha
12.46%
• Jharkhand
12.26%
• Rajasthan
10.59%
• Chhattisgarh
8.21%
• Madhya Pradesh
6.07%
• TOTAL
49.59%
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Market characteristics
POSITIVES
• Economic fundamentals
• Seeking efficiencies
• Business environment improving
• Australian METS highly regarded
CHALLENGES
• Price sensitive
• Slow to open new mines
• Slow approvals process for Government clearances
• Large public sector presence with slow decision making
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METS
DRIVERS
• Energy security and shortage of coal
• Supply to steel and cement sectors (coking coal)
• Big players
NEEDS
• Expand production of minerals, oil & gas
• Develop new mines
• Improving efficiency of existing projects
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Areas of Opportunity
•
•
•
•
Geomining consultancy
Contract mining
Mining IT
Mineral beneficiation technology &
equipment
• Underground mining supplies
• Safety, skills training, simulation
• Niche equipment
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Market Entry Strategies
• Take a long term view of the market
• Own presence or agent/distributor in market important
• Selection of agent/distributor/own staff critical
• Consider in-market value addition to be cost competitive
• Local staff engagement is cost competitive
• Factoring of the size and diversity of the country in plans
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Austrade’s South Asia Approach
• Tier 2 city visits for opportunity sourcing
• Client outreach (Austmine webinar), market insights,
strategic tie ups.
• Buyers missions to Australia (e.g. AIMEX 2015, QME
2016)
• In-market events (IME 2016, IMME 2016)
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Austrade’s strength is in our NETWORK
Austrade has 10 offices in
India & strong industry contacts in
major centres and Tier II cities
Our network provides market
insights to Australian companies
entering the market to help them
select the:
• projects
• partners
• locations
to give them the greatest chance of
success
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Staffing and Reach
Austrade Team
•
•
•
•
Partha Sen – Kolkata (Eastern India)
Amit Khaira – Delhi (Northern India)
Bhavin Kadakia – Mumbai (Western India)
Ramakrishna Dastrala – Hyderabad (Southern India)
• WA, NSW, QLD, VIC – teams in India.
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Indian Mineral Sector- Massive Untapped
Potential
P R Mandal
Head – Strategy and Business Development,
Essel Mining & Industries Ltd, (an Adityabirla Group Co.)
The Aditya Birla Group: A Premium Global Corporation
 A US $41 billion corporation
 Anchored by an extraordinary force of over 120,000 employees,
belonging to 42 nationalities.
 Over 50 per cent of its revenues flow from its overseas operations
spanning 36 countries.
 Ranked fourth in the world and first in Asia Pacific in the ‘Top
Companies for Leaders’ study 2011, conducted by Aon Hewitt,
Fortune Magazine and RBL
 Topped the Nielsen's Corporate Image Monitor 2014-15 and
emerged as the Number one corporate, the 'Best in Class', for the
third consecutive year.
Globally, the Aditya Birla Group is:
 A metals powerhouse, among the world's most cost-efficient
aluminium and copper producers. Hindalco-Novelis is the largest
aluminium rolling company. It is one of the three biggest
producers of primary aluminium in Asia, with the largest single
location copper smelter
 No.1 in viscose staple fibre
 No.1 in carbon black
 The fourth-largest producer of insulators
 The fifth-largest producer of acrylic fibre
 Among the top 10 cement producers globally
 Among the best energy-efficient fertiliser plants
 The largest Indian MNC with manufacturing operations in the
USA, wherein 95 per cent of the workforce comprises of
Americans
Aditya Birla Group – The Indian Scenario
 A top fashion (branded apparel) and lifestyle player
 The second-largest player in viscose filament yarn
 The largest producer in the chlor-alkali sector
 Among the top three mobile telephony companies
 A leading player in life insurance and asset management
 Among the top two supermarket chains in the retail business
Aditya Birla Group – Beyond Business
 Reaches out annually to 7.5 million people through the Aditya Birla
Centre for Community Initiatives and Rural Development
 Works in 5,000 villages globally
 Focuses on: health-care, education, the girl child, sustainable livelihood,
women empowerment projects, infrastructure and espousing social
reform.
 Runs 42 schools which provide quality education to 45,000 children.
Merit Scholarships are given to 24,000 children from the interiors.
 Its 18 hospitals tend to more than a million villagers.
 Ongoing education, healthcare and sustainable livelihood projects in
Philippines, Thailand, Indonesia, Egypt, Korea and Brazil, lift thousands
of people out of poverty
 Set up the Aditya Birla India Centre at the London Business School.
 The Aditya Birla Group transcends conventional barriers of business
because we believe it is our duty to facilitate inclusive growth
Basic Mineral scene in India
India produces 88 minerals
4 Fuel minerals
10 Metallic minerals
50 Non-Metallic minerals and
21 minor minerals (incl. building & others)
3 atomic minerals
Mining Industry accounts for ~2% GDP
Mining Sector employs over 1.2 Million
Currently less than 1% of land are under mining
In 2014-15, India had 3025 operative mines – excluding
mining areas for minor minerals, crude petroleum, natural
gas and atomic minerals.
Rank
5th
NA
1st
5th
6th
NA
4th
5th
3rd
3rd
% of World
Reserves
NA
Mineral
7%Coal
Limestone
30%Mica*
6%Iron Ore
3%Bauxite
2%Copper
6%Lead & Zinc
9%Manganese
13%Titanium
5%Chromite
Resource Base -in
Million tonnes
301564
184935
53237
31322
3479
1511
709
430
394
321
In addition 20% of Global Beach Sands Heavy Minerals deposits.
India’s Production Rank across Key Minerals – 2010
Intensity of Mineral Consumption Expected to Accelerate
Significant Mineral Potential still Untapped in India
Policy Framework
FDI up to 100% is allowed in exploration, mining, minerals processing and metallurgy
under the automatic route for all non-fuel and non-atomic minerals including
diamonds and precious stones.
Mining and mineral separation of titanium-bearing minerals and ores, its value
addition and integrated activities fall under the government route of foreign direct
investment up to 100%.
FDI in coal mining is allowed for captive consumption only.
As per Mines & Minerals Development and Regulation (Amendment) Act, 2015 all
mining leases for major minerals shall be granted for the period of 50 years. Mining
leases in respect of notified minerals such as bauxite, iron ore, limestone and
manganese ore shall be granted through auction.
The National Mineral Policy 2008 (NMP) enunciates measures like assuring rights to
next stage mineral concession, transferability of mineral concessions and transparency
in the allotment of concessions in order to reduce delays which are seen as
impediments to investment and technology flows in the mining sector in India.
Foreign Investors
• BHP Billiton (Australia)
• Rio Tinto (Australia)
• Vedanta Resources (UK)
• Indian Resources Limited (Australia)
• JFE Steel Corporation (Japan)
• Australian Indian Resources (Australia)
• China Steel Corporation (Taiwan)
• NSL Consolidated (Australia)
• Kolar Gold (Guernsey)
Opportunities In Indian Coal Sector
Indian Coal Sector
• Coal is the backbone of the Indian energy sector
• 78% of the coal mined is used in electrical power generation
• Source for about 73% of the electricity generated
• Third largest energy consumer globally
• Per capita electricity consumption lower than many emerging
economies
• India has large coal reserves estimated above 300 bn T
• Fourth largest proven coal reserves in the world
• Third largest coal producer in the world, annual production of ~ 640
Mt
• Coal production target set by Coal ministry by 2019-20 ~ 1.5 Bt
• Coal Mines (Special Provisions) Act, 2015 paves way for
commercial mining
Estimated All India Demand
1600
1373
1400
1285
1200
1200
981
1000
800
770
787
13-14
14-15
600
400
200
0
16-17
19-20
20-21
21-22
* Working Group Estimated Demand in 16-17 & 21-22 981 Mt & 1373 Mt respectively
Coal fired electricity growing faster than coal production
Focus on bridging the gap between demand & supply
i. Enhancement in production of CIL to bridge the gap
800
(Figs in Million Tonnes)
600
400
200
0
2014-15
2015-16
2016-17
Existing
2017-18
Ongoing
2018-19
Future
2019-20
Opportunities In Exploration
Public expenditure on exploration
India spends barely US 5 million on Exploration, which is less than 0.5% of the
annual global spend of USD 900 mill.
Massive Potential Across Minerals
Metric
India
Benchmark
Land mass for which Geo-
2-4%
90-100%
Physical/ Geo-Chemical data
(Australia)
is available
Depth for Exploration for
Coal
600 metres
1800 metres
(developed countries)
Massive Potential Across Minerals
Name of the Mineral
Reserves : Resource
Iron Ore
0.279
Bauxite
0.273
Copper
0.97
Limestone
0.042
Lead
0.175
Zinc
0.226
If we take it into account the fact that even the Mineral bearing potential has been
assessed for a very small part of the country’s total land mass this ratio will come out
to be still worse.
Opportunities in Exploration services
 India, part of Gondwana land mass has similar mineral resource potential as
Brazil, Australia and Africa
 Huge resource Base of minerals i.e. iron Ore, Coal, bauxite, Limestone,
Manganese etc.
 Exploration depth ~ 120 meters vs. ~ 500 meters in Australia/Canada.
 Geo-Physical/Geo-Chemical mapping ~ 2-4% of Indian land mass vs 90-100% in
case of Australia
 Mining contribution in GDP ~ 1.5% compared to
 Activity set to rise in exploration (regional, large-scale and detailed)
 Minerals (Evidence of Mineral Contents) Rules, 2015 ~ conversion of
regionally explored blocks into full exploration for auctioning as per UNFC
classification
 National Mineral Exploration Trust set up to intensify exploration in noncoal minerals. Yearly influx ~ Rs. 450 crs
 Huge gap in promotional & detail exploration capability compared to target
for Coal exploration set in XII plan
 Foray in exploration activity through organic or inorganic route.
33
Opportunities in Consulting
Industrial Health, Safety Research and Training
 Australia has developed best practices in this area- It can help Indian
companies in upgrading technology for higher productivity, greater
safety and better environmental compliance and thus incorporating the
latest international mining equipment, technology and services (METS).
 Opportunities exist in Simulation and training, Safety, including safety
systems and equipment
 Australian companies like Salva Resources doing well in India. Revenues
of $13.6 million in 2011
 Simtars, a world-leading industrial health, safety research and training
organisation, recently accredited 20 in-house safety training staff for
Coal India, after a comprehensive two-year training program. This was a
three-stage program run over two years to establish trainers who could
provide long-term education on the fundamentals of risk management
for Coal India employees.
IT Consulting
A Mining Surveillance System (MSS) for major minerals is being
developed to curb the incidences of illegal mining with the use of
space technology.
The Centre has requested the state governments to provide the
available digitised lease-wise information for all major mineral
leases in their state for expediting the development of MSS.
In various public and private mining companies , usage of Surpac,
Minex, Vulcan, Geological modelling software, Simulation
software to predict underground mine environment and mine
design
GIS /RFID system use by regulators and licensees
An ambitious project by the Geological Survey of India for an
online core business integrated system for geological mapping
Jharia Master Plan
Investment potential of over 2 billion over next 10 years
through GoI initiatives
Opportunities for mine fire control
Mine environment improvement
Infrastructure development
Only 60% Mining Projects Proposed in Last 17 Years got Forest
Clearances
Consulting on how to implement Australian ‘best practices’??
Scientific Mining to reduce adverse impact on environment
Titanium
Titanium – Indian Story so far
 India has 375-400 Mt - 21 per cent of the world’s titanium bearing
minerals
 Extant along the Indian coastline
 Of the 7,000km, only 2,500km has been explored
 India’s installed capacity is 1% of world capacity
 Demand of around 150,000 t/yr of Titanium dioxide –Imports
about 70% of it
 Per capita consumption of Titanium products in India is 0.4 kg - Per
capita consumption in developed countries is 5 kg
 With a $150-billion window of opportunity in defence equipment
with the government's 'Make-in-India' push, titanium is poised to
see huge demand
Panel Discussion
• Pravat Mandal, Head - Strategy & Business Development, Essel
Mining & Ind. Ltd.
• Tim Martin, Trade Commissioner, India - Austrade
• Partha Sen, Team Leader METS, Austrade Kolkata
• Peter Baldwin, Regional Director India, Government of Western
Australia
• Bhanu Rahoni, Manager India, Government of Western
Australia