11
Metals and Mining
For updated information, please visit www.ibef.org
MARCH
2013
22
Contents Advantage India
Market overview and trends
Growth drivers
Success stories: CIL, SAIL
Opportunities
Useful information
For updated information, please visit www.ibef.org
Metals and Mining MARCH
2013
33
Metals and Mining
For updated information, please visit www.ibef.org ADVANTAGE INDIA
Advantage India
Advantage
India
• Rise in infrastructure development and automotive production driving growth in the sector
• Power and cement industries also aiding growth in the metals and mining sector
• There is significant scope for new mining capacities in iron ore, bauxite, and coal
• Untapped metal reserves in India are to the tune of 82 billion tonnes
• India holds a fair advantage in cost of production and conversion costs in steel and alumina
• It’s strategic location enables convenient exports to developed as well as the fast-developing Asian markets
• 100 per cent FDI allowed in the mining sector under the Automatic Route
• Mining lease granted for a long duration of minimum 20 years and up to 30 years
• Approval of MMDR Bill (2011) to provide better legislative environment for investment and technology
Industry value:
USD305.5 billion
2015F
Industry value:
USD141.9 billion
2011
Source: Datamonitor, Aranca ResearchNotes: FDI - Foreign Direct Investment, MMDR Bill - Mines and Mineral (Development
and Regulation) Bill
Demand growth Attractive opportunities
Competitive advantage
Policy support
MARCH
2013
44
Contents Advantage India
Market overview and trends
Growth drivers
Success stories: CIL, SAIL
Opportunities
Useful information
For updated information, please visit www.ibef.org
Metals and Mining MARCH
2013
55For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Evolution of the Indian metals and mining sector
• Mining sector received a boost post independence under the impact of successive Five Year Plans
• Central Government promulgated Industrial Policy Resolution
• The exploration of minerals was intensified and the Geological Survey of India was strengthened
• Indian Bureau of Mines was established to look after the scientific development of mineral resources
• Mineral Exploration Corporation established to conduct exploration with focus on coal, iron ore, limestone, dolomite and manganese ore
• India is the largest producer of sheet mica, the third largest producer of iron ore and the fifth largest producer of bauxite in the world
• Crude steel production in India expanded at a CAGR of 6.8 per cent over 1980-2011
• India accounted for 7.3 per cent of the metals and mining industry in the Asia-Pacific region in 2011
1947
1956
1972
Present
Metals and Mining
Source: DataMonitor, Notes: CAGR - Compound Annual Growth
Rate
MARCH
2013
66For updated information, please visit www.ibef.org
Source: Aranca Research
MARKET OVERVIEW AND TRENDS
Metals and Mining
Metals and Mining
Iron and steel
Coal
Aluminium
Base metals
Precious metalsand minerals
Iron and steel segment offers a product mix which includes hot rolled parallel flange beams and
columns rails, plates, coils, wire rods, and continuously cast products such as billets, blooms, beam, blank, rounds and slab, and metallics and
ferro alloy
Coal market consists of primary coal (anthracite, bituminous and lignite)
Aluminium segment includes alumina chemicals, primary aluminium, aluminium extrusions,
aluminium rolled products
Base metal market consists of lead, zinc, copper, nickel and tin
Precious metals market includes gold, silver, platinum, palladium, rhodium, diamond
MARCH
2013
Segments of metals and mining industry
77For updated information, please visit www.ibef.org
→ India’s metals and mining industry recorded a strong 19.8 per cent expansion in 2011 to touch USD141.9 billion
→ Much of the above growth in the industry’s value can be attributed to higher prices given that production volume growth was relatively lower at 3.2 per cent (total production stood at 716.3 million metric tonnes)
→ Production volumes have been growing steadily over the years - over 2007-11, it registered a CAGR of 5.2 per cent; with prices also rising during this period, the sector’s value rose by around 17.7 per cent (CAGR)
Value of India’s metals and mining industry (USD billion)
Source: Datamonitor, Aranca Research
MARKET OVERVIEW AND TRENDS
Notes: CAGR - Compound Annual Growth Rate
Metals and Mining
2007 2008 2009 2010 2011
74.0
105.489.7
118.4
141.9
MARCH
2013
Strong growth in India’s metals and mining sector over the years
88
72.4%
7.3%
7.0%
4.2%9.2% China
Japan
India
South Korea
Rest of Asia-Pacific
For updated information, please visit www.ibef.org
→ Iron and steel is the largest segment of the Indian metals and mining industry, accounting for 68.5 per cent of the overall industry value (2011); coal is the other major sub-segment with a 26.5 per cent share
→ India accounted for 7.3 per cent of the metals and mining industry in the Asia-Pacific region in 2011
Shares in India’s metals and mining industry (2011)
Source: Datamonitor, Aranca Research
MARKET OVERVIEW AND TRENDS
Metals and Mining
India’s share in the metals and mining industry inAsia-Pacific (2011)
68.5%
26.5%
3.2%1.6%
0.2%
Iron & Steel
Coal
Aluminium
Base Metals
Precious metals & minerals
MARCH
2013
Iron and steel accounts for a major share in India’s metals and mining sector
99For updated information, please visit www.ibef.org
Iron ore: Production remains strong
→ India is the world’s fourth largest iron ore producer (global share of 11 per cent)
→ Iron ore production is estimated to have grown at a CAGR of 2.6 per cent between FY07 to FY11; total production in FY11 stood at almost 208 million tonnes
→ In FY11, the share of the private sector in total iron ore production in India was 72 per cent
→ Andhra Pradesh, Chhattisgarh, Goa and Jharkhand accounted for 97 per cent of India’s total iron ore production in FY11
Iron ore production (million tonnes)
Source: Ministry of Mines (Annual Report 2011-12),
Aranca Research
MARKET OVERVIEW AND TRENDS
Metals and Mining
FY07 FY08 FY09 FY10 FY11
187.7213.3
233.8 218.6208.0
MARCH
2013
1010For updated information, please visit www.ibef.org
→ Given that iron ore is a key ingredient in steel production, the expansion in iron ore production in India can be linked to the country’s fast-expanding steel sector
→ Crude steel production expanded at a CAGR of 8.0 per cent over 2005-11 to touch 72.2 million metric tonnes
→ India is the fourth largest producer of crude steel in the world (2011) with a global share of 4.8 per cent
Source: World Steel Association, Aranca Research
MARKET OVERVIEW AND TRENDS
Metals and Mining
Shares in global crude steel production (2011)
45.9%
7.2%
5.8%
4.8%4.6%
China
Japan
United States
India
Russia
Crude steel production (million metric tonnes)
2005 2006 2007 2008 2009 2010 20110
10
20
30
40
50
60
70
80
45.8 49.5 53.157.8
62.866.8
72.2
MARCH
2013
Rising steel demand driving growth in iron ore production
1111For updated information, please visit www.ibef.org
→ India is the world’s third largest exporter of iron ore
→ With rising domestic demand-supply gap and to make domestic supplies more attractive, the government on March 2011 hiked freight charges and taxes on iron ore exports
India’s exports of iron and steel (USD billion)
Source: Reserve Bank of India , Aranca Research
MARKET OVERVIEW AND TRENDS
Metals and Mining
FY07 FY08 FY09 FY10 FY11 FY12
5.2 5.4
5.8
3.6
5.1
6.5
MARCH
2013
Rising domestic demand puts pressure on supply of iron and steel … (1/2)
1212For updated information, please visit www.ibef.org
→ India has turned into a net importer of iron and steel due to strong growth in the manufacturing sector and rising infrastructure projects
→ India’s transition into a net importer of steel despite the strong growth in domestic steel production shows the demand potential of the sector
→ The impact of strong growth in domestic steel production has been most felt in the iron ore sector; with steel firms’ ever rising demand for the raw material, India’s imports of iron ore has been growing steadily (for example, iron and steel imports increased at a CAGR of 13.3 per cent over FY07-12)
India’s imports of iron and steel (USD billion)
Source: Reserve Bank of India, Aranca Research
MARKET OVERVIEW AND TRENDS
Metals and Mining
FY07 FY08 FY09 FY10 FY11 FY12
6.4
8.79.5
8.2
10.4
12.0
MARCH
2013
Rising domestic demand puts pressure on supply of iron and steel … (2/2)
1313For updated information, please visit www.ibef.org
→ Coal production recorded a CAGR of 8 per cent over FY08-10
→ In the coming years, coal production in the country is likely to receive a boost as the government plans to replace the country’s captive mining policy in coal and iron ore with an open bidding one
Coal production (million tonnes)
Source: Government of India (GOI), Ministry of Coal, Aranca Research
Notes: CAGR - Compound Annual Growth RateRE - Revised Estimate, BE - Budget Estimate
MARKET OVERVIEW AND TRENDS
Metals and Mining
FY08 FY09 FY10 FY11RE FY12BE
457.0 492.8533.0 544.9
575.0
MARCH
2013
Coal production growing at a steady pace
1414For updated information, please visit www.ibef.org
India’s role in global coal production
→ India is the world’s fourth-largest producer of coal, with the world’s fourth-largest reserves
→ Coal India Ltd (CIL), a Government of India enterprise, is the world’s largest coal company based on raw coal production and coal reserves
Shares in global coal production (2010)
Source: BP - Statistical Review of World Energy 2011, Aranca Research
MARKET OVERVIEW AND TRENDS
Metals and Mining
14.8%
6.3%
48.3%
5.8%
5.0%
19.8%USAustraliaChinaIndiaIndonesiaRest of the World
MARCH
2013
15
Source: Geological Survey of India, Indian Bureau of Mines, Aranca Research
Coal deposits in million tonnes (mt)Iron ore deposits in million tonnes (mt)
States with major coal
deposits
• Jharkhand (76,963 mt)
• Odisha (66,307 mt)
• Chhattisgarh (46,682 mt)
• West Bengal (29,853 mt)
• Andhra Pradesh (22,016 mt)
• Madhya Pradesh (21,988 mt)
• Maharashtra (10,308 mt)
States with lower coal
deposits
• Uttar Pradesh (1062 mt)
• Meghalaya (577 mt)
• Assam (387 mt)
• Nagaland (316 mt)
• Bihar (160 mt)
• Sikkim(101 mt)
• Arunachal Pradesh (90 mt)
States with iron ore
deposits
• Odisha (44.8 mt)
• Karnataka (34.3 mt)
• Goa (3.7 mt)
• Chhattisgarh (3.4 mt)
• Jharkhand (3.2 mt)
• Andhra Pradesh (0.8 mt)
• Madhya Pradesh (0.3 mt)
• Maharashtra (0.1 mt)
Metals and MiningMARCH
2013
Key geological coal and iron ore deposits in India
For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
1616For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Segment Major Player Market Share Other players
Iron and Steel NA Sesa Goa, SAIL, Orissa Minerals
Coal 80%Bharat Coking Coal, Reliance Natural Resources, Northern Coalfields
Aluminium 60%National Aluminium Company (NALCO), Bharat Aluminium Company (BALCO)
Metals and MiningMARCH
2013
Major metals and mining players in the country
1717For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Captive mining for coal
• In captive mining for coal, companies are permitted to set up coal washeries and for specified end uses, including the setting up of power plants, fertilisers and steel units
• Under the captive route, the government has allocated 198 coal blocks with geological reserves of about 42 billion tonnes to various public and private sector companies
Focus on domestic market
• The demand for metal and metal products is rising in the domestic market with India being a net importer in the metals segment
• In March 2011, freight charges and taxes on iron ore exports were increased to boost domestic supplies
Overseas ventures
• In search of greater mineral opportunities, an increasing number of Indian mining companies are venturing overseas in a bid to secure stable, long-term supplies of minerals especially in the areas of coal and iron ore
• Coal India plans to export 10 MT of coal from Mozambique to India in the next 10 years; the company is seeking more licence blocks in Mozambique
Metals and Mining
Notes: MT - Metric Tonnes
MARCH
2013
Notable trends in the metals and mining sector
1818
Contents Advantage India
Market overview and trends
Growth drivers
Success stories: CIL, SAIL
Opportunities
Useful information
For updated information, please visit www.ibef.org
Metals and Mining MARCH
2013
1919For updated information, please visit www.ibef.org GROWTH DRIVERS
Strong fundamentals and policy support aiding growth
Metals and Mining
Policy support
Relaxed FDI norms
Reduced customs duty
Increasing investments
Value of M&A deals in
metals and mining rose at a CAGR of 138 per cent over
2008-11
Increasing FDI
Sustained growth in India’s
automotive sector
Rising production of
cement increasing
demand for coal
Growing infrastructure investments
Inviting Resulting
in
Higher demand for metals
Notes: M&A - Mergers and Acquisitions, FDI - Foreign Direct Investment
MARCH
2013
Aluminium and coal benefiting
from rising power
production
Allowing private ownership
2020For updated information, please visit www.ibef.org
Power and automotive production fuelling demand … (1/2)
→ Sustained growth in India’s automotive sector has been driving demand for steel and aluminium
→ Automotives production increased at a CAGR of 13.2 per cent over FY05-12
→ Passenger vehicles was the fastest growing segment during this period with a CAGR of 14.5 per cent
→ India is expected to become the world’s seventh-largest automobile market by 2016 and the third largest by 2030
Source : SIAM, Aranca ResearchNotes: FY - Indian Financial Year (April - March)
GROWTH DRIVERS
Total production of automobiles in India (million units)
Metals and Mining
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY120
3
6
9
12
15
18
1.2
1.3
1.3
1.6 1.8 2.
4 3 3.1
0.4
0.4
0.5 0.
6000
0000
0000
001
0.4 0.60
0000
0000
0000
1
0.8
0.8
0.4
0.4 0.
6000
0000
0000
001
0.5
0.5
0.60
0000
0000
0000
1
0.8
0.8
6.5 7.
6 8.5
8 8.4
10.5
13.4
15.5
Passenger Vehicle Commercial Vehicle Three WheelersTwo Wheelers
MARCH
2013
2121
FY06 FY07 FY08 FY09 FY10 FY11 FY12p0
200
400
600
800
1000
617.5662.5
704.5 723.8771.6
811.1876.4
For updated information, please visit www.ibef.org
Power and automotive production fuelling demand … (2/2)
→ The power sector accounts for a large share of the consumption of aluminium and coal in the country
→ Power generation in India increased at a CAGR of 6.0 per cent during FY06-12
→ In the Eleventh Plan, India is estimated to have added around 60,000 MW of generation capacity at an investment of USD11.5 billion
→ To meet growing power demand, the Power Ministry has targeted capacity addition of 85,000 MW in the Twelfth Plan (2012-17) period
Source : Central Electricity Authority (CEA), Aranca Research
Notes: TWh - Terawatt-hour, p - provisional
GROWTH DRIVERS
Power generation in India (in TWh)
Metals and MiningMARCH
2013
2222For updated information, please visit www.ibef.org
A fast-expanding construction sector has aided growth in metals demand … (1/2)
→ Infrastructure projects continue to provide lucrative business opportunities for steel, zinc and aluminium producers
→ India’s infrastructure sector expanded at a CAGR of 15.8 per cent over FY08-11
GROWTH DRIVERS
India’s expanding infrastructure industry (USD billion)
Metals and Mining
Source : Business Monitor International ‘s (BMI) report on infrastructure industry in India Q4 2012,
Aranca ResearchNote: F - forecasts (by BMI)
FY08 FY09 FY10 FY11 FY12E FY13F FY14F FY15F FY16F FY17F
37.048.3 48.1
57.565.5 65.0
80.997.3
115.4
136.4
MARCH
2013
2323For updated information, please visit www.ibef.org
→ India’s residential and non-residential building industry expanded at a CAGR of 10.7 per cent over FY08-11
→ Growth in the sector is set to increase in the next few years; forecasts put the CAGR for FY12-17 at 14.5 per cent
→ Iron and steel being a core component of the real estate sector, demand for these metals is set to continue given strong growth expectations for the residential and commercial building industry
GROWTH DRIVERS
Residential and non-residential building industry (USD billion)
Metals and Mining
Source : Business Monitor International’s (BMI) report on infrastructure industry in India, Aranca
ResearchNote: F - forecasts (by BMI)
A fast-expanding construction sector has aided growth in metals demand … (2/2)
FY09 FY10 FY11 FY12F FY13F FY14F FY15F FY16F FY17F
57.3 55.370.2
80.1 78.795.8
113.4134
158
MARCH
2013
2424For updated information, please visit www.ibef.org
Rising cement production - contributor to growing coal demand
→ India is the world’s second-largest producer of cement; the sector’s strong expansion over the past decade has been a key contributor to rising coal demand
→ By FY13, the cement sector is expected to add additional capacity of 92.3 million tonnes
GROWTH DRIVERS
Cement production in India (million tonnes)
Source: CMA, Edelweiss research, Ministry of External Affairs (Govt. of India), Department of Industrial Production, Aranca
ResearchNote: e - Estimates
Metals and Mining
FY08 FY09 FY10 FY11 FY12e
168
182 207
228 247
MARCH
2013
2525For updated information, please visit www.ibef.org GROWTH DRIVERS
Source: Aranca Research
Metals and Mining
Higher cement production
Increasing number of houses
Large infrastructure
projects
Expanding road construction
Government support
MARCH
2013
Factors behind rising cement production in India
2626For updated information, please visit www.ibef.org
→ Within the Asia-Pacific region, India is ahead of South Korea and Philippines in the mining sector; at the same time it is in competition with Australia, Malaysia, China, Indonesia and Japan
Source : India mining report by BMI-Q2 2012, Aranca Research
Note: Description of each headline given in the Appendix
GROWTH DRIVERS
Metals and Mining
Limits of potential returnsRisks to realisation of
returns
Mining Industry
Country structur
eLimits
Market risks
Country risk
Risks Mining rating
India 25.0 52.8 34.7 68.5 53.2 60.8 42.6
South Korea 10.0 66.2 29.7 77.7 57.5 67.6 41.0
Japan 12.5 70.8 32.9 86.4 77.9 82.1 47.7
Philippines 17.5 56.2 31.1 60.4 41.5 51.0 37.0
MARCH
2013
India has a distinct competitive advantage over its peers
2727For updated information, please visit www.ibef.org
Notes: FDI - Foreign Direct Investment
GROWTH DRIVERS
Metals and Mining
Allowing private ownership
• Government of India is encouraging private ownership for steel operations and other high priority industry
Reduced custom duty
• Government of India significantly reduced the duty payable on finished steel products and has streamlined the associated approval process
Relaxed FDI norms
• FDI up to 100 per cent is permitted under the Automatic Route to explore and exploit all non-fuel and non-atomic minerals and process all metals as well as for metallurgy
• FDI caps for coal and lignite has been increased to 100 per cent under the automatic route
Approved NMP• In a positive move for the sector, in 2008, the Indian Cabinet
approved the National Mineral Policy (NMP) 2008, to boost FDI in mining
MARCH
2013
Strong policy support gives metal and mining sector a boost
2828For updated information, please visit www.ibef.org
MMDR bill
GROWTH DRIVERS
Metals and Mining
Overview of the MMDR bill
• GOI approved the new mining bill - the Mines and Minerals Development Bill (MMDR) - on 30th Sep 2011; the bill calls for mining firms to share either profits or amounts equivalent to royalties with local communities
• The proposed bill is expected to make it easier to win local approval and smoothen the land acquisition process
General restrictions and mineral concessions
Process of revenue collection and
usage
• Central government to establish National Mineral Fund; respective state governments to establish State Mineral Fund(s)
• District Mineral Foundation will be set up by the state government which will work for the interest and benefit of persons or families affected by mining related operation in the district and will be managed by a governing council
• The mining tax collected will be spent within the district
• Reservation of areas for PSUs removed• State governments to set up special courts to expedite
prosecution in illegal mining• Statutory Coordination cum Empowered Committee at central and
state levels to decide upon stringent penalties for offences
Notes: GOI - Government of India, PSUs - Public Sector Undertakings
MARCH
2013
2929For updated information, please visit www.ibef.org
→ Cumulative FDI inflows over Apr 2000 - Sep 2012 into the metals and mining sector stood at USD8.2 billion
→ The sector accounted for 4.8 per cent of total cumulative FDI inflows during the period
GROWTH DRIVERS
Metals and Mining
FDI inflows into metals and mining overApr 2000 - Sep 2012 (USD million)
Source : Department of Industrial Policy & Promotion, Aranca Research
Notes: FDI - Foreign Direct Investment
Metallu
rgical
Industr
y
Mining
Diamond, G
old Orn
amen
ts
Coal Pro
duction
0
2,000
4,000
6,000
8,0006,726.0
1,071.1361.9 24.8
MARCH
2013
Foreign investments flowing in; rise in planned expenditure … (1/2)
3030For updated information, please visit www.ibef.org
→ Total M&A deal value in metals and mining increased at a CAGR of 138 per cent during 2008-11
→ In 2011, M&A deal value in the mining sector stood at USD11.2 billion, 292 per cent higher than the corresponding figure for 2010 (USD2.9 billion)
GROWTH DRIVERS
Metals and Mining
Source: Thomson Banker, Deal tracker, Aranca Research
M&A activities (as of Sep 2012)
Acquirer TargetAcquisition Price
(USD million)
Vedanta Resources PLCCairn India Ltd (30.4% stake in December
2011)4,541.9
Sesa Goa Ltd Sterlite Industries 3,911.0
Vedanta Resources PLC Cairn India Ltd (10.1% stake in July 2011) 1,513.2
GVK Power & Infrastructure Ltd Hancock Coal-Queensland Coal 1,260.0
Sesa Goa Ltd Cairn India Ltd 1,175.9
JFE Steel Corp JSW Steel Ltd 1,029.1
Lanco Resources Australia Griffin Coal Mining Co Pty Ltd 722.7
MARCH
2013
Foreign investments flowing in; rise in planned expenditure … (2/2)
3131
Contents Advantage India
Market overview and trends
Growth drivers
Success stories: CIL, SAIL
Opportunities
Useful information
For updated information, please visit www.ibef.org
Metals and Mining MARCH
2013
3232For updated information, please visit www.ibef.org
Coal India Limited (CIL): Leader in mining industry in India … (1/2)
Notes: CAGR - Compound Annual Growth Rate,
MoU - Memorandum of Understanding, FY - Indian financial year (April - March)
Revenues (USD billion)
SUCCESS STORIES:CIL, SAIL
Metals and Mining
→ CIL signed an MoU with Ministry of Coal in 2011, wherein CIL targets to produce 461.5 million tonnes of coal
→ CIL also signed an MoU with Shipping Corporation of India in 2010 to create comprehensive end-to-end logistic solutions
Source: Bloomberg, Aranca Research
• Set up in 1967, Coal India Limited (CIL) is the largest coal mining company in India
• Coal India contributes around 85 per cent of total coal production in India
FY07 FY08 FY09 FY10 FY11 FY12
6.5
8.1 8.59.4
11.47
14.57
MARCH
2013
3333For updated information, please visit www.ibef.org
Coal India Limited (CIL): Leader in mining industry in India … (2/2)
Coal production (in million tonnes)
SUCCESS STORIES:CIL, SAIL
Metals and Mining
→ The company's strategic overseas ventures with Colombia and US enabled it to meet India's rising energy demand
→ CIL plans to invest about USD6.25 billion to increase capacity, acquire new mining projects, machineries and equipment
→ Government has recently allocated 116 coal blocks to CIL for expansion
Source: Company Website, Aranca Research
FY07
FY08
FY09
FY10
FY11
FY12
0.0 50.0 100.0150.0200.0250.0300.0350.0400.0450.0500.0
336.6
353.3
377.2
395.1
390.0
397.5
24.3
26.2
26.5
36.1
41.4
38.4
Non Coking Coal Coking Coal
MARCH
2013
3434For updated information, please visit www.ibef.org
Steel Authority of India Ltd (SAIL): A story of steel … (1/2)
Revenues (USD billion)
SUCCESS STORIES:CIL, SAIL
Metals and Mining
→ SAIL has entered into a Joint Venture with POSCO, Korea; Kobe Steel Limited, Japan; Rashtriya Ispat Nigam Ltd; Larsen & Toubro Ltd; National Mineral Development Corporation; Hindustan Prefab Ltd; and IRCON International Limited, Turkey
→ SAIL employees bagged the maximum number of Viswakarma Awards declared in Aug 2009
→ SAIL's expansion plan worth USD15 billion will increase its production capacity from 14 million tonnes per year (current) to 24 million tonnes by 2013
Source: Company website, Aranca Research
• Incorporated in 1954, Steel Authority of India Ltd (SAIL) is India's second largest producer of iron ore
CAGR - Compounded Annual Growth RateNotes: Viswakarma Award is for outstanding achievement or good performance on the part of workers in increasing
productivity, quality, safety, working conditions, import substitution etc
FY07 FY08 FY09 FY10 FY11 FY12
7.1
8.29.0
8.48.9
9.6CAGR: 6.1%
MARCH
2013
3535For updated information, please visit www.ibef.org
Total saleable steel production (million tonnes)
SUCCESS STORIES:CIL, SAIL
Metals and Mining
→ It won the Gold Trophy of “SCOPE Meritorious Award for R&D, Technology Development & Innovation” for 2007-08
→ It was also awarded the “Corporate Social Responsibility & Responsiveness“ by the President of India in FY09
Source: Company website, Aranca Research
Steel Authority of India Ltd (SAIL): A story of steel … (2/2)
FY07 FY08 FY09 FY10 FY11 FY12
12.6 13.0 12.5 12.6 12.9 12.4
MARCH
2013
3636
Contents Advantage India
Market overview and trends
Growth drivers
Success stories: CIL, SAIL
Opportunities
Useful information
For updated information, please visit www.ibef.org
Metals and Mining MARCH
2013
3737For updated information, please visit www.ibef.org
Opportunities
OPPORTUNITIES
Metals and Mining
Untapped market with strong growth potential
• India’s per capita steel consumption was 55 kg in mid 2011 compared to the global average of 225 kg
• Rural per capita steel consumption is likely to double from its present consumption of 9.7 kg by 2015
• By FY12, a shortfall is expected in domestic supply of steel worth 3-8 million tonnes
Scope for new mining capacities in iron ore,
bauxite and coal
• India has the world’s fifth-largest reserve base of bauxite and fourth-largest base of iron ore respectively, and accounts for about 7 per cent and 10 per cent respectively, of total world production
• India also has the fourth-largest global reserve base of coal, and accounts for 7.5 per cent of the total world production
Rapid growth of user-industries to drive
demand for metals and minerals
• Strong long-term demand from the steel industry is expected to further boost the iron ore industry
• Increasing power production is likely to catapult demand for coal
• Booming construction, automobiles, and packaging industries are expected to lend substantial support to the metals and mining sector Note: kg -
kilograms
MARCH
2013
3838
Contents Advantage India
Market overview and trends
Growth drivers
Success stories: CIL, SAIL
Opportunities
Useful information
For updated information, please visit www.ibef.org
Metals and Mining MARCH
2013
3939For updated information, please visit www.ibef.org USEFUL INFORMATION
Industry Associations
Aluminium Association of India118, 1st Floor, Ramanashree Arcade18, M. G. RoadBengaluru, Karnataka - 560 001Phone: 91- 80-25582197, 25582757Fax: 91-80-25594535E-mail: [email protected]
Federation of Indian Mineral IndustriesFIMI House, B-311, Okhla Industrial AreaPhase - I , New Delhi -110 020Phone: 91-11- 26814596Fax: 91-11- 26814593E-mail: [email protected]
Indian Stainless Steel Development AssociationL -22/4, DLF Phase - IIGurgaon, Haryana -122 002Phone: 91-124 - 4375501Fax: 91-124 - 4375509E-mail: [email protected]
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Appendix
BMI’s Mining Business Environment Ratings• Market structure: it takes into consideration mining output in USD billion, sector value growth, % y-o-
y r, mining sector, % of GDP
• Country structure: it takes into consideration labour market infrastructure, physical infrastructure r, tax, and scope of state
• Market risks: it considers metals prices, 5-year, forecast average, metals price forecast, average 5-year growth, regulatory framework, legal framework
• Country risk: it considers, long-term external risk, corruption, bureaucracy , long-term policy continuity
• Mining ratings: it shows the overall scores of the above indicators
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2013
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Glossary
→ CAGR: Compound Annual Growth Rate
→ FDI: Foreign Direct Investment
→ FY: Indian Financial Year (April to March)
→ So FY10 implies April 2009 to March 2010
→ GOI: Government of India
→ IBM : The Indian Bureau of Mines
→ MoU: Memorandum of Understanding
→ PPP: It could denote two things (mentioned in the presentation accordingly) -
→ Purchasing Power Parity (used in calculating per-capita GDP)
→ Public Private Partnership (a type of joint venture between the public and private sectors)
→ PE: Private Equity
→ USD: US Dollar
→ Conversion rate used: USD1= INR48
→ Wherever applicable, numbers have been rounded off to the nearest whole number
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2013
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