This report gives insights into the issues faced by the mining sector in India, and suggests the way forward for the industry.
The mining sector, in many countries, has been resilient despite the global financial crisis and has contributed substantially to the recovery of their economies.
For an emerging country like India, which is looking to supplies from the west, the following factors are stepping up demand:
- The need to build infrastructure
- The demand for consumer goods
Much of this demand is best met indigenously for socio-economic development, alongside managing domestic inflation and exchange rates.
Endowed with abundant reserves of key minerals such as iron ore, bauxite, dolomite, gypsum, limestone, mica, chromite, manganese, zinc and graphite, India presents significant opportunities in the metals and mining space.
However, with Indian exploration budget continuing to be minimal at 0.5% of the global spend; the opportunity is still largely unexplored. Mining can be a significant contributor to the socioeconomic development of vast mineral-rich districts across India. Concerted effort from all stakeholders - governments, planners, policy makers, mining industry, technology and service providers and the host communities - is required with good governance and responsible leadership.
With the volatility of commodity prices, companies are focusing on optimizing efficiency and profitability, by:
- Improving operational performance
- Managing capacity utilization
- Undertaking strategic JVs
The economic power is now shifting towards resource ownership and margins are moving upstream in the value chain. The new MMDR Act, when enacted, is expected to facilitate the further development of the mining and exploration sector and help attract foreign flow to the industry.
Given the present globally competitive environment, the mining industry must work on new financial strategies, aggressive exploration development programs, investment-friendly policies and regulatory framework, value addition of minerals and the use of productivity enhancing techniques.
Some of the key strategic recommendations that the report makes for the mining industry to achieve sustainability and accelerate investments for the benefit of all the stakeholders are:
- Sustainable development
- Minerals taxation reforms
- Increase collaboration with global mining equipment manufacturers
- Develop infrastructure network
- Build strategic alliances
- Attract professionals to Indian mining services
- Collaborate to strengthen operations
- Develop special mining regions and SPVs
- Judicious resource nationalism
- Mineral specific strategy
- Risk capital for exploration
Download the report for a detailed insight into the sector.