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.
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.