The metal and mining industry of India recorded 20% expansion in 2011 and expected to more than double in revenue to $305 billion by the end of 2015. Production volumes have been growing steadily within each export market and India’s strategic location enables convenient exporting to both developed markets as well as the fast-developing Asian markets.
The industry is key for India’s manufacturing sector – and for the economy as a whole. Many industries are directly dependent on it such (as automobiles & components, electrical appliance & products, infrastructure, building & construction, power, agriculture, telecom, railways, aviation, engineering, oil and gas, defense, R&D, transport) and many more are indirectly dependent.
The steel sector contributes nearly 2% of the country’s gross domestic product (GDP) and employs over 600.000 people, and India has an advantage in both production and conversion costs of steel and aluminum, while sustained growth in India’s automotive sector has been driving demand for steel and aluminium. Demand for iron and steel is set to continue, given the strong growth expectations for the residential and commercial building industry and India is set to become the second largest producer of steel by the end of 2015.
India has among the world’s largest reserve bases of bauxite and iron ore, accounting for about 5% and 8% respectively of total world production. It produces 88 minerals – 4 fuel-related minerals, 10 metallic minerals, 50 non-metallic minerals and 24 minor minerals. In 2012-13, India had 3,108 active mines – excluding mining areas for minor minerals, crude petroleum, natural gas and atomic minerals.
The large and well publicized scandals in mining severely impaired foreign investment in the sector as the bidding process for allocations came under scrutiny from 2012 and the Supreme Court cancelled 214 of the 218 allocations for coal mining since 1993. However, the coal blocks are slowly being auctioned off now and there have been a number of initiatives by the Government to improve the stability of the industry and restore overseas confidence – e.g. the new Land Acquisition Act, R&R Policy, policies for procurement of raw materials; infrastructure support (location of steel plant, transportation, power, water), R&D and environmental management, while promotion of steel use and its consumption and trade policy will encourage growth in the steel industry. The Government of India has allowed 100 % foreign direct investment (FDI) in the mining sector under the automatic route and new mining leases have been granted for 20 years to 30 years each.
The demand for various metals and minerals will continue to grow substantially over the next 15 years – both internationally and as India’s booming population requires more goods – and by 2025-26, forecasters predict that the steel industry can produce over 275 million tonnes of crude steel, to cater to the domestic demand alone. With all the improvements envisaged, the Indian metal and mining industry will establish its place at the front of the global market.
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