The growth of the mining & metallurgy industry in India is crucial for India’s growth in the next decade. While demand for commodities has been strong, supply has been constrained. If mining does not keep up with the demand, downstream industries will have to work with imported raw material, thus becoming less competitive. So what are the opportunities for the Indian Metallurgy Industry?
India has very large mineral reserves. An amount equal to USD25 billion to USD33 billion is expected to be invested in steel sector over the next six to seven years. The scope for new mining capacities in iron ore, bauxite and coal is huge. India has the world’s sixth-largest reserve base of bauxite and fourth-largest base of iron ore respectively, and accounts for about 7 % and 11 % respectively, of total world production. Moreover, India has the world’s fifth-largest coal reserves and accounts for 7.5% of total global production.
The rapid growth of user-industries drives the demand for metals and minerals. The prospected long-term demand from steel industry will boost the iron ore industry. The power production will increase and therefore, the demand for coal of other industries like automotive, construction and industrial automation has a positive effect on the metal and mining sector.
The expansion of product lines by existing players is a major factor for further development of this industry. Proposed exploration zones are Odisha, Jharkhand, Karnataka, Maharashtra, Chattisgarh as well as Andhra Pradesh. Therefore, India needs to expand its logistics infrastructure for major steel, iron ore and coking coal routes. Land acquisition will need to be streamlined, railways upgraded to deal with increased volumes, and port efficiency and capacity need to be enhanced. In order to realize these necessities, the Government, the project proponents as well as other stakeholders have to find a collaborative approach. Another important aspect is the mining labour. The Industry plans to create employment for about half a million skilled and unskilled labour force in the industry which currently employs 1.1 million people. It is crucial for sustainable development of the sector, especially as there could be an incremental demand of 1.5 to 2.5 times of the current workforce by 2025.
The Indian government has launched “Make in India” to expand the contribution of manufacturing. The New Industrial policy opened up the Indian iron and steel industry for private investment by removing it from the list of industries reserved for public sector and exempting it from compulsory licensing. Imports of foreign technology as well as foreign direct investment are now freely permitted up to certain limits under an automatic route. Ministry of Steel plays the role of a facilitator, providing broad directions and assistance to new and existing steel plants, in the liberalized scenario.
In the next two years, India’s steel consumption is forecast to grow annually by about 5%–6%. Indian steel capacity is also expected to rise from 99 million tonnes (mt) in 2013 to about 125mt in 2016, registering a CAGR of 8.8%. The Government of India has floated a target to produce 300mt by 2025–26. India has just overtaken the U.S. to become the third-largest producer of steel after China and Japan. With all these future prospects in hand and with a strong economic outlook and plans to expand steel production, it is likely that India will be on a fast-track growth path in steel production to be the second-largest steel producer within a few years.
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 WSA, Ernst and Young, TechSci Research