Investment Opportunity in Metal Ores Sector

India has got huge resource of metal resources. It is one of the top producers of Mica, Coal, Iron, Bauxite, Aluminum etc. Metals are necessary for various industries hence this sector is nodal for industrial development. Government of India has initiated many reforms in this sector to pace up the mining activity.

Facts and Figures

• The rich resource of India includes iron ore, bauxite, chromium, manganese and titanium
• The iron ore reserves of India is fifth largest in the world. India has nearly 13 billion tonnes of iron ore reserves
• India has fourth largest bauxite reserves. Total bauxite reserves of India is around 2.3 billion tonnes
• The total manganese reserves of India is 160 million tonnes, which makes it 2nd largest country in terms of manganese reserve in the world
• India stands third in chromium reserves. The total chromium reserves of India is 57 million tonnes
• The quality of Indian Bauxite and Iron are among the best in the world
  

Industry Structure

• Out of the total mining activity, the share of the Public sector companies is 80%
• After the post reform period of 1991 some of the private players are also joining mining and metallurgical sector. Some of the major Private players engaged in mining and metallurgical sector are- Tata Steel, Hindalco and Sterlite
• Public sectors engaged in this venture are- SAIL, Nalco, National Mineral Development Corporation (NMDC) and Hindustan Copper
• The major mineral ore producing regions of India are Orissa, Jharkhand and Chattisgarh. Orissa has the largest reserves of bauxite reserves and over 20% reserves of iron ore
  
  

Government Policy
In order to enhance the productivity of mining government is encouraging investments for value added metal manufacturing. Government of India has permitted 100% FDI under the automatic route for mining of metal ores

Investment Opportunity and Potential

• There is an investment opportunity of $10 -15 billion in this sector in the next five years. The growth in the metal manufacturing industry will also enhance the growth of this sector.
• The production of Iron ore might grow at a CAGR of 10 - 12% over the next five years, due to increasing demand from the steel industry
• The production of Bauxite is also expected to double to over 23 million tonnes by 2010
  The consumption of manganese and chromium is also expected to grow
• India has good quality reserves
• The conversion cost and the cost of the labor is low
• There is a ready made market in India. The domestic demand of various minerals is increasing
  India's geographical position is such that it is closed to the developed European markets and the fast-developing Asian markets for export of Steel, Aluminum
• According to reports, nearly 82 billion tonnes of reserves of various metals are yet to be tapped
• There is a good scope in investing in mining of Iron ore and Bauxite
• The aluminum production capacity of India is just 3% of world capacity whereas the total bauxite reserves in India is 7.5% of the world’s total bauxite deposits, this simply reflects that there is requirement for new capacities
• International metal manufacturing players like POSCO, Mittal Steel and Alcan have announced plans for expansion in India