Mines & Metals

India has world’s sixth largest reserve base of bauxite and fifth largest base of iron ore, which accounts for about 5% and 8% respectively of total world production. There are about 302 Billion tons of coal reserves in 3108 operational mines of India. India has the 6th largest bauxite reserves of the world along with 5th largest iron ore reserves. India has vast minerals potential with mining leases granted for longer durations of 20 to 30 years and had the demand for various metals and minerals will grow substantially over the next 15 years. The power and cement industries also aid growth in the metals and mining sector and the strategic location enables convenient exports. India’s per capita steel consumption is four times lower than the global average. India produces 88 minerals – 4 fuel-related minerals, 10 metallic minerals, 50 non-metallic minerals and 24 minor minerals. India is slated to become the second largest producer of steel by 2015.

Current foreign Investments

Minerals like manganese, lead, copper and alumina are expected to witness double digit growth in the years ahead. There is significant scope for new mining capacities in iron ore, bauxite, and coal. India has an advantage in the cost of production and in conversion costs of steel and alumina. Infrastructure projects continue to provide lucrative business opportunities for steel, zinc and aluminum producers. India had 301.56 Billion tons coal reserves as of April 2014.

Mining and mineral separation of titanium-bearing minerals and ores, its value addition and integrated activities fall under the government route of foreign direct investment up to 100%. FDI in coal mining is allowed for captive consumption only.

  • Japanese steel maker Daido Steel Company will pick up 10 per cent stake in Maharashtra-based Sunflag Iron and Steel for around Rs 56 crores (US$ 9.09 million).
  • Posco India, the subsidiary of the South Korea headquartered company, will invest US$ 20 million to set up a steel plant in Sanand in Ahmedabad. The plant will produce steel sheets to meet demand from automobile companies that have made a hub in Sanand.
  • Essar Steel has announced the commissioning of an integrated 6 MT iron ore pellet plant near Paradip in Odisha. The factory is linked by a 253 km slurry pipeline with a facility which is located at Odisha's iron ore belt and can beneficiate low-grade ore.
  • JFE Holdings Inc. of Japan’s the second-largest steelmakers have agreed to buy 48 billion rupees ($1 billion) of securities in India’s JSW Steel Ltd.

Government Initiatives and Future Plans

The Basic Customs Duty (BCD) on ships imported for breaking up is being reduced from 5% to 2.5%. Full exemption from basic customs duty is being granted to pre-forms of precious and semi-precious stones. One-tenth of the expenditure on prospecting, extraction and production of certain minerals during five years ending with the first year of commercial production is allowed as a deduction from the total income.

  • Export profits from specified minerals and ores are eligible for certain concessions and minerals in their finished form are exempt from excise duty.
  • There is low customs duty on capital equipment used for minerals on nickel, tin, pig iron and unwrought aluminum.
  • Capital goods imported for mining under the EPCG scheme qualify for concessional customs duty subject to certain export obligations.
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