INTRODUCTION:

India is abundantly rich in minerals, and boasts a production of up to 95 minerals which includes four fuel related minerals (e.g., coal), 10 metallic minerals (e.g., iron ore), 23 non-metallic minerals (e.g. limestone), three atomic minerals (e.g. uranium) and 55 minor minerals, 1 which are extracted from a vast network of approximately 1,300 mines. Moreover, India is self-sufficient or close to self-sufficiency in several key minerals, including bauxite, chromite, limestone, iron ore, sillimanite etc. However, in minerals like manganese, kyanite and Coal, India experiences a deficiency and thus needs to import them to satisfy its demands. To keep the industry globally competitive, India plans to maximize the use of its domestic reserves to meet its requirement for coking coal to reduce iron ore to iron.

While India is indeed well-endowed with minerals, the sector still holds significant untapped potential. The country has ample opportunities for further development as it seeks to explore and harness its yet-unrealized mineral resources.

To accomplish “Atmanirbhar Bharat (Self Reliant India)”, The Government of India is working towards the development of the metals and mining sector by launching key policy initiatives and regulatory interventions in the auction process, levy of duties, and land availability. Though coal remains the major demand driver in mining, India still imports a large quantity of it. The demand for coal is expected to grow steadily till India has adequate alternative renewable energy options. Hence the Government of India has taken the necessary steps to ramp up coal production to over 1 billion tonnes by 2023-24, which is expected to increase the demand for mining equipment to new heights. The private sector has also adopted new technologies, automation, and digitization. However, there is still a considerable scope of improvement.

INDIAN MINERAL RESERVES:

India is a mineral rich nation with substantial mineral reserves and a long history of mining that dates back to over 6,000 years to the time of Indus Valley Civilization. The minerals (both major and minor) that India is endowed with form a key resource for major industries such as steel, cement and power amongst others. With the quantum of reserves that India has of various minerals and coal, mining sector has a huge role to play in the Indian Economy.

In iron ore, India is amongst the top ten resource rich nations. Indian iron ore reserves are pre-dominantly of Banded Iron Formation (BIF) dating back to the Precambrian age2. Our ore reserves comprise of hematite and magnetite of which the former is the most important on account of its higher-grade quality and is the primarily consumed ore type in the Indian steel industry.

India is amongst the top five nations in terms of coal reserves. Indian coal reserves are primarily of bituminous type of non-coking grade characterized by higher ash content.

CURRENT MARKET SCENARIO OF MINING AND MINING EQUIPMENT IN INDIA:

The booming industry of construction for commercial and residential structures would keep the demand for metallic minerals intact. The enormous pace at which infrastructure development is happening in the country reveals multiple opportunities for growth in the mining sector. Additionally, the industry is also benefiting from the expanding notion of energy efficiency in major construction projects.

India possesses a significant degree of self-sufficiency in the production of iron ore. Due to the pandemic the production of Iron Ore decreased by 17% in FY21. However, in FY22 the production has observed a growth of 24% owing to the spur in demand of steel and the focus of Indian Government to boost infrastructure activities.

Aligning with the shifting paradigm of on-time project delivery with quality and with the initiative of the ‘Make in India’ campaign, there is an augmented demand for modernized and mechanized methods of mining leading to an increase in demand for smart and connected equipment solutions. Equipment manufacturers should implement digitization and adapt to automated and self-operating innovative technologies for competitive and long-term sustainable growth.

GDP GROWTH OUTLOOK:

India is following the path to achieve its target of becoming a US$ 5 Trillion economy by 2025. The International Monetary Fund (IMF) has revised India’s economic forecast for the current year to 6.3% from the earlier 6.1% as per the October 2023 World Economic Outlook (WEO) report. These forecasts highlight India’s emergence as a positive factor for global growth. The IMF predictions for China remain at 5.2% for 2023 and 4.0% for next year.

Realizing India’s aspirations for further growth, which also requires a substantial investment in infrastructure, will not be possible without due attention to the further development of mining and coal sectors in India. There is no doubt that India figures amongst the nations where the mining sector is a significant contributor towards the national economy.

Over the period of five years, the growth in metallic production was 10% and growth in non-metallic production was 3%. The split up of the production between metallic and non-metallic, minor minerals was 49% and 51% respectively. Indian coal production for the last four years has increased 5.5% by volume and has improved by 7.4% by value indicating a strong revenue potential in the mining operations of India. Around 81% of total mineral reserves in India is coal, which makes it one of the strongest mineral reserves of India.

CONTRIBUTION OF THE MINING SECTOR TO THE INDIA ECONOMY:

The importance of mining can be assessed from the fact that for every 1% incremental growth in mining and quarrying sector results in approximately 1.3% incremental growth in industrial production and 0.3% incremental growth in India’s GDP. The mining sector’s contribution to Indian GVA has improved over the years with a CAGR of 9% over the last 5 years. Also, the mining sector contribution to overall Indian GVA has remained robust at 2%.

FUTURE OUTLOOK:

India has the potential to become a global mining equipment manufacturing hub, due to its skilled workforce, low labour costs, and a favourable business environment. The Government’s efforts to simplify business processes and provide a supportive environment for manufacturing have helped manufacturers to improve their efficiency, productivity, and competitiveness.

The mining equipment industry would be stable in the near-medium term due to the Government’s continuous focus on infrastructure development. The three critical sectors for driving demand are ─ the transportation infrastructure (roads, rail, airports, ports), urban infrastructure (mass rail transit systems, water supply and sanitation, urban housing), and rural infrastructure (rural roads, irrigation, rural housing).

To boost domestic manufacturing of earth-moving equipment used in mines, Coal India Ltd. has announced phasing out of imports over the period of 5-6 years.

As India offers significant potential as an OEM hub due to lower costs and the availability of skilled labour, new equipment manufacturers are expected to establish a base in India. Companies are now moving towards localization of parts as imports are becoming expensive which is increasing the scope of growth in the sector and allied sectors.

With the private participation and constant effort of the Government for the development of the mining sector significant growth can be achieved in the upcoming years. Though the growth of the metal and mining industry has been historically driven by domestic consumption moving forward both domestic demand and augmentation of exports will be a critical factor in the growth of the industry and its contribution to GDP growth.