Indian Mining Industry Forecast Through 2015
During 2010–15, the expansion of key end markets such as construction, infrastructure and power generation will continue to drive demand for minerals.
London – 17 August 2011 - As a result of strong economic growth, the Indian mining industry increased at a compound annual growth rate (CAGR) of 11.1% during 2004–09 (the review period) to value over US$20 billion in 2009. The mining equipment market is expected to grow from under US$3 billion in 2010 to US$4.5 billion in 2015. The majority of demand will continue to be met by domestic equipment manufacturers, though the growing market will begin to attract foreign companies.
While coal accounts for over half of all Indian mining activity, iron ore dominates the metallic mineral category, accounting for four-fifths of this category’s mining activity. Limestone accounts for three-quarters of Indian non-metallic mineral production.
The Indian government has increasingly liberalized its mining sector to encourage foreign direct investment (FDI). However, the government recently adopted an increase in mining royalties for minerals such as copper, zinc and lead. The new system is designed to make assessment and collection simpler and enhance royalty accruals to state governments.
Strong growth in the Indian mining industry
As a result of strong economic growth, the Indian mining industry increased at a CAGR of 11.1% during the review period (2004–09), to value over US$20 billion in 2009. Total mineral production grew at a CAGR of 7.6% in the same period, to reach an estimated 1.1 billion tons in 2009. During the forecast period (2010–15), the expansion of key end markets such as construction, infrastructure and power generation will continue to drive the demand for minerals. As a result, the Indian mining industry is forecast to produce over 1.5 billion tons of minerals by 2015, growing at a CAGR of almost 6% during the forecast period.
Increase in royalty rates will affect company revenue
The Indian government adopted an increase in mining royalties in August 2009 for minerals such as copper, zinc and lead. For instance, the government increased royalties on zinc ore from 6.6% to 8%, and imposed a 10% value-added royalty on iron ore mining. For iron ore mining companies, the new royalty will mean switching to a tax regime under which the companies will be charged based on the market value of the minerals produced, rather than the existing system of flat rates based on volumes. The new system is designed to make assessment and collection simpler and enhance royalty accruals to state governments. However, the revised rates will also increase production costs for miners, depending on the value of the mineral.
Coal dominates the Indian mining sector
Coal was India’s most valued mineral in 2009, accounting for half of the total mineral production. Iron ore dominates the metallic mineral category, with its total production valued at US$4.8 billion in 2009. The non-metallic category is dominated by limestone, with its production valued at US$0.6 billion in 2009, or 2.8% of the total Indian mineral production.
While coal accounts for over half of all Indian mining activity, iron ore dominates the metallic mineral category, accounting for four-fifths of this category’s mining activity. Limestone accounts for three-quarters of Indian non-metallic mineral production.
Government policies favor FDI
The Indian mining industry was largely under government control until 1993, when the government announced a new Mineral Policy opening the mining industry to FDI. The Foreign Investment Promotion Board was established to consider FDI proposals on an individual case basis.
In accordance with the new policy, foreign equity is limited to 50% for participation in mining projects, and limited to 74% for participation in services relating to mining. The policy was further relaxed in 1997, by allowing an ‘automatic approval’ route, and again in 2006, by allowing 100% FDI through this route in all metallic and non-metallic ores, with the exception of titanium. In particular, captive coal and lignite attracted significant FDI, and are expected to continue to do so over the forecast period
Domestic equipment manufacturers will meet a majority of demand
The mining equipment market is expected to grow from under US$3 billion in 2010 to US$4.5 billion in 2015, at a CAGR of 10.0%. The majority of demand will continue to be met by domestic equipment manufacturers. However, the recent liberalization of the mining sector means that it is likely that the upgrade of mining equipment will result in investment opportunities for foreign equipment manufacturers.
To purchase the full version of The Indian Mining Industry - Market Opportunities and Entry Strategies, Analyses and Forecasts to 2015, please click here.
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Industry Review is a collection of incisive, regularly updated market reports across 40+ industry sectors and 100+ countries.
We provide access to the latest data on global and local markets, key industries, top companies, M&A activity, new product launches and trends so you can make faster and better informed business decisions.
The reports in our store draw on robust primary and secondary research, proprietary databases, industry surveys and insightful analysis from our own expert teams and from carefully selected third-party publishers.
With access to over 400 in-house analysts and journalists, and a global media presence in over 30 industries, Industry Review delivers in-depth knowledge of local markets worldwide.
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For more information on the article, please contact:
Press Contact:
Shelly Wills
Tel: +44 (0) 20 7936 6671
shelly.wills@industryreview.com
During 2010–15, the expansion of key end markets such as construction, infrastructure and power generation will continue to drive demand for minerals.
London – 17 August 2011 - As a result of strong economic growth, the Indian mining industry increased at a compound annual growth rate (CAGR) of 11.1% during 2004–09 (the review period) to value over US$20 billion in 2009. The mining equipment market is expected to grow from under US$3 billion in 2010 to US$4.5 billion in 2015. The majority of demand will continue to be met by domestic equipment manufacturers, though the growing market will begin to attract foreign companies.
While coal accounts for over half of all Indian mining activity, iron ore dominates the metallic mineral category, accounting for four-fifths of this category’s mining activity. Limestone accounts for three-quarters of Indian non-metallic mineral production.
The Indian government has increasingly liberalized its mining sector to encourage foreign direct investment (FDI). However, the government recently adopted an increase in mining royalties for minerals such as copper, zinc and lead. The new system is designed to make assessment and collection simpler and enhance royalty accruals to state governments.
Strong growth in the Indian mining industry
As a result of strong economic growth, the Indian mining industry increased at a CAGR of 11.1% during the review period (2004–09), to value over US$20 billion in 2009. Total mineral production grew at a CAGR of 7.6% in the same period, to reach an estimated 1.1 billion tons in 2009. During the forecast period (2010–15), the expansion of key end markets such as construction, infrastructure and power generation will continue to drive the demand for minerals. As a result, the Indian mining industry is forecast to produce over 1.5 billion tons of minerals by 2015, growing at a CAGR of almost 6% during the forecast period.
Increase in royalty rates will affect company revenue
The Indian government adopted an increase in mining royalties in August 2009 for minerals such as copper, zinc and lead. For instance, the government increased royalties on zinc ore from 6.6% to 8%, and imposed a 10% value-added royalty on iron ore mining. For iron ore mining companies, the new royalty will mean switching to a tax regime under which the companies will be charged based on the market value of the minerals produced, rather than the existing system of flat rates based on volumes. The new system is designed to make assessment and collection simpler and enhance royalty accruals to state governments. However, the revised rates will also increase production costs for miners, depending on the value of the mineral.
Coal dominates the Indian mining sector
Coal was India’s most valued mineral in 2009, accounting for half of the total mineral production. Iron ore dominates the metallic mineral category, with its total production valued at US$4.8 billion in 2009. The non-metallic category is dominated by limestone, with its production valued at US$0.6 billion in 2009, or 2.8% of the total Indian mineral production.
While coal accounts for over half of all Indian mining activity, iron ore dominates the metallic mineral category, accounting for four-fifths of this category’s mining activity. Limestone accounts for three-quarters of Indian non-metallic mineral production.
Government policies favor FDI
The Indian mining industry was largely under government control until 1993, when the government announced a new Mineral Policy opening the mining industry to FDI. The Foreign Investment Promotion Board was established to consider FDI proposals on an individual case basis.
In accordance with the new policy, foreign equity is limited to 50% for participation in mining projects, and limited to 74% for participation in services relating to mining. The policy was further relaxed in 1997, by allowing an ‘automatic approval’ route, and again in 2006, by allowing 100% FDI through this route in all metallic and non-metallic ores, with the exception of titanium. In particular, captive coal and lignite attracted significant FDI, and are expected to continue to do so over the forecast period
Domestic equipment manufacturers will meet a majority of demand
The mining equipment market is expected to grow from under US$3 billion in 2010 to US$4.5 billion in 2015, at a CAGR of 10.0%. The majority of demand will continue to be met by domestic equipment manufacturers. However, the recent liberalization of the mining sector means that it is likely that the upgrade of mining equipment will result in investment opportunities for foreign equipment manufacturers.
To purchase the full version of The Indian Mining Industry - Market Opportunities and Entry Strategies, Analyses and Forecasts to 2015, please click here.
About Industry Review:
Industry Review is a collection of incisive, regularly updated market reports across 40+ industry sectors and 100+ countries.
We provide access to the latest data on global and local markets, key industries, top companies, M&A activity, new product launches and trends so you can make faster and better informed business decisions.
The reports in our store draw on robust primary and secondary research, proprietary databases, industry surveys and insightful analysis from our own expert teams and from carefully selected third-party publishers.
With access to over 400 in-house analysts and journalists, and a global media presence in over 30 industries, Industry Review delivers in-depth knowledge of local markets worldwide.
For more information, please visit our website at www.industryreview.com
For more information on the article, please contact:
Press Contact:
Shelly Wills
Tel: +44 (0) 20 7936 6671
shelly.wills@industryreview.com
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