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INDUSTRY REPORT Mining Industry 2020

Jan, 2020

INDEX Overview of Mining Industry in India …3

Overview of Mining Industry inTelangana & Andhra Pradesh …4

Why Telangana & Andhra Pradesh? …6

Demand Drivers

o Growth in Infrastructure sector ...8

o Power Sector …9

o Steel Sector …10

o Cement Sector …10

o Ceramic Sector …12

Initiatives and Policy Support by Government …13

Why Hyderabad as a Destination for Organizing

Expos on Mining Industry ...16

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Overview of Mining Industry in India

1. The total value of mineral production (excluding atomic & fuel minerals) during 2017-18 has been estimated at INR 1,13,541 crore

2. Growing at CAGR of 15-20% Y-o-Y 3. India ranked 4th amongst the mineral producer countries; behind China, US, &

Russia o India is the 3rd largest producer of coal. Coal production in the country stood

at 676.51 million tonnes in FY18 with 1530 operational mines o Ranks 4th in iron ore production and expected to reach 210 million tonnes o 3rd largest steel producer with 102. 34 million tonnes o Combined Aluminum production of NALCO, BALCO, HINDALCO and Vedanta

increased 5.65% to 1.84 MT in FY18 from 1.74 MT in FY17 o 6th largest bauxite reserves around 650 million tonnes

1. Telangana’s mining revenues have increased from INR 1,207 crore in 2010-11 to INR 3,700 crore in 2018-19, registering a 300% increase

2. Telangana has identified mining as one of the core sectors and through its industrial policy has been attracting significant investments

3. Around 20% of India’s Coal deposits are found in Telangana o State produces about 33 million tonnes of industrial minerals, 50 to 55 million tonnes

of coal and 54 million cubic meters of dimensional stones and building material

Mining Industry in Telangana & Andhra Pradesh (refer as AP in report)

18%

15%

9%

8% 8%

9%

6%

5%

5% 17%

State Wise break down Rajasthan

Odisha

Chattisgarh

Jharkhand

Gujarat

AP

Telagana

MP

Assam

Others Total market share of

A.P + Telangana is 15-20%

Sources: Ministry of mines Mines And Geology, Telegana, Ministry of Mines A.P

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Overview of Mining Industry in Telangana & Andhra Pradesh (1/2)

Sources: Ministry of mines Mines And Geology, Telegana, Ministry of Mines A.P

3. Telangana plays key role in framing of National Mineral Policy o It contributed ingenious and resourceful inputs to the Ministry of Mines,

Government of India, for framing the new National Mineral Policy o Inputs on more transparency, effective regulation, encourage merger and

acquisition, PPP model of working, acquisition of mineral assets in other countries by private sector and long term import and export policy

3 Reconnaissance Permits for Gold, Diamonds, Base metals, 18 prospecting License and 521 Mining Lease for Major Minerals (Industrial Minerals), 1186 Quarry leases for cut and dressed blocks of Granites and 1429 Quarry leases for other Minor Minerals (Construction Minerals)

SCCL plans to take up seven coal blocks in various States and 48 mines in Telangana to meet the growing demand for coal with an additional requirement of 800 MW Thermal plant set up Sales surged from INR 5,600 crore in 2014-15 to INR 13,000 crore in

2017-18, registering a growth of 132% Profits were up from INR 290 crore to INR 1,200 crore, up 314 %

New Investment

With increasing construction activity, TSMDC aims to excavate 1crore metric tonnes of sand during FY 2018-19 To meet the requirement of the states, 6 new stockyards are constructed to store the sand and supply through M-sand supply State government earned INR 886 crore in 2018-19, registering about 30% growth in revenues, compared to INR 678 crore in 2017-18

4. A. P ranks 1st in in production of Barytes, Limestone, Mica and Silica Sand in India o 93% share of India’s Barytes reserves o 30% share of India’s Heavy Mineral Beach Sand reserves o 18% share of India’s Bauxite reserves o Leading granite producing state, with 132.5 MT granite resources o 2nd largest producer of cement with over 19.6 MT of limestone resources o Potential to develop glass and ceramic industry due to Abundant availability of

Quartz, Quartzite, Silica Sand and clay resources

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Existing Players

Sources: Ministry of mines Mines And Geology, Telegana, Ministry of Mines A.P

Overview of Mining Industry in Telangana & Andhra Pradesh (2/2)

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Why Telangana & Andhra Pradesh? (1/2)

Hyderabad is gearing up to become the largest industrial hub in Telangana and South India, as it has existing conducive ecosystem 1. Mineral Producers/ Mines Owners a) Total 1800+ mineral based industries in Telegana

723 granite cutting and polishing units in Telangana 463 Stone crusher units in Telangana Around 234 brick lins within two states 183 Limestone slab cutting & polishing units 80 Quartz pulverizes units in Telangana Approx. 55 Fullers earth processing units Link: Scope of establishment of mineral based industries in the Telangana

b) Total 1,700 + mineral-based industries in AP c) National Mineral Development Corporation(NMDC) is Indian state-controlled

mineral producer having its headquarters in Hyderabad and its Sponge Iron unit in Khammam.

2. Mining Machinery & infrastructure a) Growth in demand for Mining equipment during FY 2017-18 recording a growth

of 23%. Total mining equipment in Telangana and AP is 17,000 – 19,000 Units b) Presence of large & medium infrastructure companies are 50+ c) Total number of civil contractors are 400+ d) Total number of builders are 1000 + e) Presence of leading institutions such as National Cement, Construction and

Building Material (NCCBM), National Academy of Construction f) Presence of more than 100+ dealers or traders in the region g) Presence of regional branches – L&T, Volvo, ACE, Universal, JCB, Doosan,

Caterpiller, Mahindra, Sandvik

3. Cement, Pumps & Valves, Tyre, spare parts, steel & ceramic a) Total number of cement plants are 50 + b) Total number of ceramic plants are 35+ c) Approx 60+ Pumps and Valves suppliers in AP and Hyderabad d) Around 30,000 + dealers, distributors & retails of Tyre industry present in these

two states e) Presence of more than 100+ Components and Spare Parts manufacturer within

two states f) Presence of more than 300+ TMT bar dealers

4. Power Generation and Transmission a) Telangana government is now gearing up to increase the total capacity to 28,400 b) MW over the next 4-5 years c) A. P. has increased the installed power capacity from 13,600 MW to 29,000 in FY

2019- 20 d) Waste-to-energy plants planned in 15 + districts within two states 5. Logistics a) Hyderabad registered 10-12% growth in logistics market in 2018 and occupied 9%

of the total warehouse space in India b) Entered into MoU with National Highway Authority of India and Container

Corporation of India for development of Multi Modal Logistics Park at Hyderabad 6. IT in Mine Planning & Surveying a) Presence of more than 300 + IT & electronic companies with two states b) As per Nasscom, Telegana has registered a growth of 9.32% during FY 2018-19

Sources: The economic times, The Hindu

Why Telangana & Andhra Pradesh? (2/2)

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Total estimated construction industry for FY 2017-18 is USD 11- 15 billion in Telangana & AP Growing with a CGAR of 10-12% Y-o-Y Telangana & AP together contributes 60-65% market of Construction Equipment in

south market size A flurry of infrastructure projects – Metro, SRDP, MMTS, ORR etc., it’s participation in

the creation of aerospace SEZ, bio-parks, financial districts, pharma city, IT hubs & start up incubators are attracting PPP investments in the region

Demand Drivers (1/5)

Telangana Government has approved INR 40,000 Crore infrastructure boost in next 3 year

Telangana government will be setting up the country's first dedicated construction and building materials manufacturing park spread over nearly 250 acres near Hyderabad with KEF Infra o Have the potential to attract INR 5,000-6,000 Crore investments and generate

around 10,000 direct jobs Heavy investment in sectors like aerospace & defense (INR 2,500 Crore), pharma (INR

64,000 Crore) , MSME (INR 10 Crore) to built industry specific parks in Hyderabad

New Investment

1. Growth in Infrastructure sector

Hyderabad has emerged as the top investment destination in the real estate sector, attracting $793 million, ahead of $ 694 million secured by Bengaluru

- P Ravinder Rao, president, TREDA

As per the recent analysis, sale of residential properties seem positive(34%) as compare to other metro & Tier 1 cities The states will spend about INR 22, 784 Crore on several infrastructure projects in

the forthcoming years

Developers and Builders in Hyderabad

Sources: 1) Make my India Website – Construction Sector 2) Dun & Bradstreet research paper, NBMCW research paper

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Demand Drivers (2/5)

2. Power Sector

Telangana has increased its installed power generation capacity to 17,500 MW from 7,778 MW in 2017 making into one of the fastest growing sectors in the country o The state is now gearing up to increase the total capacity to 28,400 MW over the

next 4-5 years o Ranks 2nd on Solar Power with generation capacity of 3,400 MW

A.P Ranked No. 1 in implementation of Energy efficiency and conservation programmes by World Bank

o 24x7 quality industrial power supply, with lowest T&D losses in the country o 18 GW renewable energy capacity by 2021-22 (10 GW solar, 8 GW wind) o Waste-to-energy plants planned in 10 districts o Implementing one of the largest solar pump sets programmes o Installed power capacity addition planed from 13,600 MW to 29,000 by 2019 o 18,000 MW of renewable energy planned by 2021-22 o 5 GW of solar power capacity addition o 4 GW of wind power infrastructure projects o Over 1 crore LED bulbs distributed under Domestic Efficient Lighting programme

(DELP)

Existing Players

Sources: Website of A.P. Government of Telangana

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3. Steel Sector

Presence of more than 300+ TMT bar dealers in Telangana & Andhra Pradesh Andhra Pradesh to set up INR 15,000 crore steel plant in Rayalaseema

o The state government proposes to bear 100 percent of the investment through loans

o It will be based on PPP model Telangana to set up INR 7,000 crore steel plant in Bayyaram. Andhra Pradesh to set up INR 4,500 crore steel plant in Kadapa.

Vizag Steel Plant plans to expand its capacity from 7.3 million tonne to about 12 million tonne per annum at an estimated cost of INR 20,000 Crore

Viki Industries, the makers of isteel TMT bars, is planning to double production capacity in 18 months and has earmarked INR 30 crore for the purpose

New Investment

4. Cement Sector

Cement industry sees about 10 to 18% in demand in Telangana and AP next two to three years

o Major reasons are - various heavy projects being undertaken by the respective governments

There are around 50-60 players in the two states and they have a total capacity of 75 Million Tonnes (out of 150 million tones market in South), of which currently 70-75% is being utilized

Cement industry in Andhra Pradesh is one of largest industries in India

French cement giant Vicat group will invest INR 1,735 Crore in the Indian cement sector involving both brownfield expansions and Greenfield projects

It also includes setting up a Greenfield cement manufacturing facility in Vizianagaram involving an investment of INR 510 Crore

It will invest INR 1,225 Crore on brownfield expansion of the Karnataka

Demand Drivers (3/5)

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Demand Drivers (4/5)

Ramco plans to set up a new 3.15MT/Yr integrated plant Kurnool District

The project has an investment of nearly US$210m

Anjani Portland Cement plans to build a new clinker production line at its Chintalapalem plant, Telangana

It has a production capacity of 1.16MT/Yr and this will rise to 2.31MT/yr once the upgrade is complete

It is expected to cost US$61million It is scheduled to be completed by the end of 2019

Orient Cement plans to upgrade its Devapur in Adilabad District, Telangana

It will invest INR 2,0000 Crore towards more than doubling the unit’s cement production capacity to 7.5Mt/yr from 3Mt/yr

Existing Players

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Source: 1) Society of Indian Automobile Manufacturers (SIAM) 2) Automotive Component Manufacturers Association of India (ACMA) 3) Department of Industries & Commerce, Government of Telangana

5. Ceramics Sector

Estimated market size of Ceramic Industry of Telangana and AP is INR 1,000 Crore and is expected shall be double by 2020

AP would soon become a ceramic hub for the ceramic industry which includes a 30

thousand crore ceramic market and a 4 thousand crore sanitary ware market

LIXIL Asia Pacific, has acquired 45 acre land with state-of-the-art facility at Bhimadole

Will serve as a central production base for the Indian market It has invested INR 400 Crore and will produce select ranges

of ceramic ware

New Investment

Cera occupies a market share of 28% in Telangana sanitaryware market which is valued at over INR 450 Crore

CERA plans to commission two units in next 3-4 months, and will invest over INR 100 crore cumulatively

It has achieved a turnover of INR 158 Crore in Telangana and AP, accounting for 14% of INR 1,180 Crore turnover

Telangana contributed to over INR 90 Crore sales, making it the largest market nationally

Somany Ceramics first plant in south India near Tiruchirapali in Andhra Pradesh

It will produce about 11,000 to 12,000 square meters of verified tiles per day

Existing Players

Demand Drivers (5/5)

Initiatives and Policy Support by Government (1/3)

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The state government has undertaken number of reforms to offer an enabling and investor- friendly business climate to the investors. Some of the key Ease of Doing Business initiatives in Telangana include:

Telangana State Industrial Project Approval and Self Certification System (TS-iPASS) established as a single point for clearances of industrial set up

Single Window system, combined application form (CAF) with provision to submit multiple applications in one form, Paperless application and incentive disbursement

Predefined timelines (max 30 days for processing applications) with provision for deemed approvals in case of no response

Minimum inspection, maximum facilitation with paperless application and incentive disbursement

Key Initiatives by the State Government

Transparency in mineral allocation Release of Policy on Value Addition of Minerals in Andhra Pradesh benchmarked

with leading mining and mineral based economies Preferential grant of mineral concessions to entrepreneurs willing to set-up

mineral based industry on a priority basis Increased focus on mineral exploration Development of Mineral Atlas for promoting mineral based industry Human resource capacity building for effective mineral administration IT enablement for efficient mineral administration Government has launched promotion of export from rural artisans through skill

upgradation in which a suitable agency will be providing skill upgradation to rural artisans for promoting exports.

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Initiatives and Policy Support by Government (2/3)

Use of GPS In an endeavour to curb the menace of illegal sand mining, states Govt

decided to introduce GPS tracking system, there were 150 notified sand reaches and 54 check posts were established to prevent illegal transport of sand

Geo referral policy where all major minerals and the permissions for mining activities were being given through auction through e-permit

Penalty of 1 lakh for unauthorized sand mining Online system in Place Introducing of M-Sand as a solution to growing sand scarcity amid increasing

demand o The state government mandated all govt. engineering dept. to use 50% of

M- Sand in all works Online mineral e- payment & e- permit system facilitates lease holders for

online statutory payments and issues of dispatch permits Online Mineral Concession application system facilitates entrepreneurs to file

Mineral concession through Meeseva portal Creation of online website “sand sales monitoring & management system” for

registration of customers, vehicles, online booking of sand, tracking of orders, interstates sand transpiration and stocky yard details

Source: 1) CII & Yes Bank report on Automotive Industry in Telangana 2) Government of Telangana – Annual report 2017-18 3) TSTPC, Government of Telangana. webiste

Initiatives and Policy Support by Government (3/3)

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Source: Telangana Government website

Industrial policy of Telangana

1. Effective Industrial Clearances Mechanism through TS- IPASS A single Common Application Form (CAF) for all departmental approvals A time limit has been set varying from 1 day to 30 days to clear the approvals Applications are pre-scrutinized at state and district level and thus avoiding delays in

processing the same It has been made mandatory for the competent authorities to seek

shortfall/additional information, within three days of receipt of application In case approvals are not accorded by departments, the projects shall be deemed

approved

2. Telangana State-Wide Investment Facilitation (T-SWIFT) to provide approvals within 15 days to mega projects (over INR 200 Crore investment

3. Telangana State Industrial Infrastructure Corporation (TSIIC) was identified to develop the potential industrial growth centres, along with developing the required infrastructure in these centres. Following are some of the initiatives undertaken by TSIIC: Establishment of Hyderabad Pharma-City at an area of 14,000 acres National Investment and Manufacturing Zones at Zaheerabad in Medak district, with

an estimated investment of INR 17,300 Crore and to generate employment to 2.61 lakh people

Aerospace and Precision Engineering SEZ at Adibatla, will hosts 10 operational aerospace components manufacturing units

Genome valley is largest innovation and life sciences cluster in Asia and is only clean manufacturing eco system. Will have more than 200 companies in the valley

T-Hub has been developed aiming at making Hyderabad as a start-up city and Telangana as a start-up State

Information Technology Investment Region (ITIR), has been cleared by the Government of India. With this IT products worth INR 2, 35,000 Crore are expected to be exported

Plastic and polymer zone in 100 acres of land in Tumaloor village of Rangareddy district. With an estimated investment of INR 123.24 Crore

Why Hyderabad as a Destination for Organizing Expos on Mining Industry – (1/2)

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Why Hyderabad?? The state is a store house for various minerals specifically coal, iron ore, limestone,

gold, diamond, dolomite, manganese, quartz, sand for stowing, barytes, uranium, limestone salbs, road metal, building stone etc.

Both public and private sectors established large and medium scale mineral based industries within two states o Total 1800+ mineral based industries in Telegana o Total 1700+ mineral based industries in A.P

The state not only has number of mineral producers, but the end user or consumers

industries are also huge

Number of construction projects are running successfully , the most significant step is fast-paced developments, such as creating infrastructure facilities and better connectivity through the Metro, SRDP, MMTS, etc. that improve the overall climate of doing business in the state o Connectivity has been a constant focus of the state government, which has

recently pumped in INR 669 Crore for the 69-km Warangal Outer Ring Road (ORR). The ORR will connect major National Highways to smaller towns

Constant supply Mining equipment in the state, more than 100+ dealers or traders in the region o Presence of regional branches – L&T, Volvo, ACE, Universal, JCB, Doosan,

Caterpiller, Mahindra, Sandvik

Increase in installed power generation capacity to 17,500 MW from 7,778 MW in 2017 making into one of the fastest growing sectors in the country o The state is now gearing up to increase the total capacity to 28,400 MW over the next

4-5 years o Ranks 2nd on Solar Power with generation capacity of 3,400 MW

Government of Telangana has identified Automobile and Auto Ancillary sector as key

thrust sector and is providing necessary eco system through incentives, subsidies through ‘Telangana State Industrial Policy Framework’

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Hyderabad is a well connected location for Exhibitors as well as Visitors

o Road connectivity: The density of notified national highways in Telangana is 2.90 km/100 sq.km against the national average of 2.84 km/100 sq.km

o Strong railway connectivity: The State also has an integrated railway network

with railway terminals such as - Nizamabad, Mahbubnagar, Kamma Reddy, Bodhan, Jedcherala, Gadwal and, Balanagar

o Access to world class airport facility: Rajiv Gandhi International Airport (RGIA),

Shamshabad is one of the largest 7 modern airports in India o Government of Telangana has entered MoU with Ministry of Civil Aviation and

Airports Authority of India for development of small airports at Kothagudem and Warangal

o Government of Telangana is ranked no 1 in Ease of Doing Business given by

Department of Industrial Policy & Promotion (DIPP) and World Bank o State of Telangana has unique geographical advantage. It geographically placed

in close proximity to major consumer markets such as Bangalore, Mumbai, Kolkata, Chennai etc.

Why Hyderabad as a Destination for Organizing Expos on Mining Industry – (2/2)

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