India Mining Report

Providing expert analysis, independent forecasts and competitive intelligence on the mining.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, BMI's Petrochemicals Risk Reward Index, Economic Forecasts, Company Profiles and Global, Regional and Country Industry Overviews.

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India Mining Report
Product Price
$1,295.00

BMI View: India's mining sector will experience solid growth, primarily boosted by the country's positive reforms and vast mineral reserves. Despite this, the sector will continue to face challenges due to the country's i nadequate operating environment, mining royalties and low metals price s , which will prevent India from reaching its full growth potential.

India - Mining Industry Value Forecast
2015e 2016f 2017f 2018f 2019f 2020f
e/f= BMI estimate/forecast. Source= USGS, UN Data, BMI
Mining Industry Value, USDbn 21.96 23.39 26.17 29.41 32.64 35.79
Mining Industry Value, USDbn, % y-o-y -15.38 6.50 11.90 12.36 11.00 9.64

Latest Developments & Structural Trends

  • India will continue to suffer from a persistent coal deficit over the coming years although the country possesses one of the world's largest coal reserves and has significant production growth potential. We forecast India's coal output to grow from 753mn tonnes (mnt) in 2016 to 1,014mnt in 2020, posting average annual growth of 7.6% during 2016-2020, a sizeable acceleration from an average growth of 4.5% annually during 2011-2015. This is because the Indian government has made great progress in improving coal mine production and coal offtake in recent quarters.

  • We forecast India's iron ore output to grow from 159.9mnt in 2016 to 198.8mnt in 2020. This represents an average annual growth of 5.0% during 2016-2020, higher than the average contraction of 5.6% y-o-y over 2011-2015, following mining bans in the three largest iron-ore producing states of Goa, Odisha and Karnataka, which have since been lifted. Although the passing of the Mines & Minerals Development and Regulation Act will support India's iron ore output growth, weak iron ore prices will limit the sector growth outlook. We forecast iron ore prices to average USD52.0/tonne over 2016-2020, significantly lower than USD115.0/tonne during 2011-2015. This is due to oversupply from Australian miners and weakened Chinese demand for iron ore.

  • We forecast India's zinc output to grow from 913.1 thousand tonnes (kt) in 2016 to 1,312.7kt in 2020. This represents an average annual growth of 9.3% during 2016-2020, significantly above the average 4.2% y-o-y growth over 2011-2015. We expect zinc prices to average USD1,750/tonne over 2016 and USD1,850/tonne over 2017. Beyond 2016, we expect prices to gradually increase due to our forecast of deepening refined metal deficits over the coming years. We forecast prices to average USD1,874/tonne during 2016-2020, below the annual average of USD2,044/tonne during 2011-2015.

  • In January 2015, the Indian government issued an executive order to enable bauxite mining licenses to be awarded via auctions, replacing the old system where licenses were issued at the discretion of provincial and federal government. We forecast growth in Indian bauxite production to grow from 22.6mnt in 2016 to 30.5mnt in 2020, averaging an annual growth rate of 6.2% during 2016-2020, significantly higher than the annual average 5.8% growth over 2011-2015. India is the world's sixth-largest bauxite producer, at 9.0% of global output in 2015. Historically, bauxite production in the country has tracked aluminum output closely.

  • India's mining sector will continue to be dominated by state-owned companies or public-sector undertakings (PSUs) including National Aluminum Corp, Steel Authority of India, National Mineral Development Corp and Coal India Ltd. According to the US Geological Survey, PSUs contribute about 85% of India's total value of mineral production and are the main producers of key commodities such as aluminum, coal, copper, gold and iron ore.

  • While growing domestic demand for commodities will incentivise state-owned miners to expand production, we believe that India's poor operating environment will continue to restrict growth in the mining sector. A spate of bureaucratic and regulatory hurdles will remain major challenges for miners to grapple with over the coming quarters. For instance, the difficulties in land acquisition and the securing of environmental clearances have led to a series of mining projects being delayed over the past year. Vedanta Resources was forced to put its bauxite mining project in Odisha on hold due to fierce protests by the local community. A bright spot, however, is Prime Minister Modi's passage of the Coal Mines (Special Provisions) Bill in March 2015 and reforms made to Coal India, which has helped to boost coal production.

BMI Industry View
7
Table: India - Mining Industry Value Forecast
7
Latest Developments & Structural Trends
7
SWOT
9
Industry Forecast
11
Bauxite: Ordinance To Boost Production
11
Latest Developments
11
Table: Bauxite Production Forecast (India 2015-2020)
12
Table: India - Bauxite Projects
12
Structural Trends
12
Iron Ore: MMDR Act, Two Sides Of A Coin
16
Latest Developments
16
Table: Iron Ore Production Forecast (India 2012-2020)
16
Table: India - New Iron Ore Projects
16
Structural Trends
17
Zinc: HZL To Lift Growth
21
Latest Developments
21
Table: Zinc Production Forecast (India 2012-2020)
21
Table: India - Select Zinc Mining Projects
21
Structural Trends
22
Coal India To Lead Growth Drive
25
Latest Developments
25
Table: Coal Production Forecast (India 2014-2020)
25
Table: India - Select Coal Mine Projects
25
Structural Trends
26
Industry Risk Reward Ratings
34
India - Risk/Reward Index
34
Rewards
34
Industry Rewards
34
Country Rewards
34
Risks
34
Industry Risks
34
Country Risks
35
Asia Risk Reward Index
35
Australia Stays On Top While India & Myanmar Gain
35
Shifting Scores Reflect Changing Sector Dynamics
36
Table: Asia - Mining Risk/Reward Index
37
Regulatory Development
38
Trade & Investment Risk Analysis
39
Commodities Forecast
43
Commodity Strategy
43
Ferrous Metals
43
Iron Ore: Price Weakness To Continue Over Coming Years
43
Steel: Oversupply To Drag Down Prices
45
Non-Ferrous Metals
48
Aluminium: Continued Weakness, But No Sharp Downturn
48
Copper: Recent Relief Rally To Fade
50
Lead: Prices Weakness To Continue
51
Nickel: Subdued Prices Due To Weak Demand Growth
52
Tin: Supply Deficits To Underpin Rally In Tin Prices
53
Zinc: Positive Multi-Year Outlook, But Increasing Risks In Months Ahead
54
Table: Select Commodities - Performance & BMI Forecasts
56
Competitive Landscape
57
Table: India - Select Listed Mining Companies
59
Company Profile
60
Coal India Ltd (CIL)
60
Table: Coal India Ltd - Key Financial Data
63
Hindustan Copper
64
Table: Hindustan Copper-Supply Chain Analysis
66
Table: Hindustan Copper - Key Financial Data
67
NMDC
68
Table: NMDC- Supply Chain Analysis
70
Table: NMDC - Key Financial Data
72
Global Company Strategy - Vedanta Resources - Q1 2016
73
Latest Financial Results
75
Company Strategy
76
Table: Vedanta Resources - Supply Chain Analysis
77
Company Details
78
Table: Vedanta Resources - Key Financial Data
79
Regional Overview
80
Continued Domination Of Iron Ore Production
80
Indian Coal Consumption To Outperform
81
China & India To Lead In Outbound Investment
82
Indonesian Ban To Continue
84
Methodology
85
Industry Forecast Methodology
85
Sources
86
Risk/Reward Index Methodology
87
Table: Weighting Of Indicators
88

The India Mining Report has been researched at source and features BMI Research's mining and commodity forecasts for metals, minerals and gems, covering all major indicators including reserves, production, exports and values. The report also analyses trends and prospects, national and multinational companies and changes in the regulatory environment.

BMI's India Mining Report provides industry strategists, service companies, company analysts and consultants, government departments, trade associations and regulatory bodies with BMI's independent forecasts and competitive intelligence on the mining industry in India.

Key Benefits

  • Use BMI's independent industry forecasts on India to test other views - a key input for successful budgeting and planning in this mining market.
  • Target business opportunities and risks in India's mining sector through our reviews of latest mining industry trends, regulatory changes and major deals, projects and investments in India.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity), Key Projects Tables and Competitive Landscape Tables.

Coverage

BMI Industry View

Summary of BMI’s key forecasts and industry analysis, covering mining reserves, supply, demand and prices, plus analysis of landmark company developments and key changes in the regulatory environment.

Industry SWOT analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the mining sector and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:

  • Mining industry: Industry size (USDmn), real growth (%), % of GDP, employment (‘000), workforce as % of total workforce, average wage (USD).
  • Output: Production volumes (‘000 tonnes, carats etc.) for all major metals, minerals, ores and gems mined in each state, including bauxite, copper, gold, coal, lead, silver, tin, titanium, uranium, zinc etc.
  • Exports: Value of exports (USDmn) for all major metals, minerals, ores and gems mined in each state.
  • Commodity markets: Global demand, supply, stocks and benchmark prices (USD) for aluminium, copper, lead, nickel, tin, zinc, gold and steel.

BMI’s Mining Risk Reward Index

BMI’s Risk Reward Indices provide investors (mining companies and support service providers) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.

Competitive Landscape Tables & Analysis

Comparative company analyses and tables detailing USD sales, % share of total sales, number of employees, year established, market cap/NAV, ownership structure, production and % market share.

Key Projects

Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by metal/ore.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Sources

The Mining reports are based on an extensive network of primary sources, such as multilateral organisations (UN, WB, IMF), national chambers of commerce and industry, national statistical offices, government ministries and central banks, and multinational companies.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.