Measuring Performance

Trends in production of select minerals

Minerals are the basic foundational element of almost every industry in an economy, and infrastructure is no exception. In India, both the public and private sectors are involved in mineral production, though the former holds the majority share. During the period April 2018 to February 2019 (as per the latest estimates available), the value of mineral production (excluding fuel minerals, atomic minerals and minor minerals) stood at Rs 662.76 billion, a growth of 28 per cent over the corresponding period of the previous year.

Indian Infrastructure presents a snapshot of mineral-wise trends in the past few years…

Coal

According to the Geological Survey of India, as on April 1, 2019, the total estimated coal resources in the country stood at 326,495.63 million tonnes (mt).

The production of raw coal at the all-India level increased from 565.77 mt in 2013-14 to 730.35 mt in 2018-19. The absolute increase in the all-India coal production during this five-year period was 164.58 mt as compared to an increase of 73.01 mt achieved in the preceding five years (2008-09 to 2013-14). Coal India Limited (CIL) also increased its production from 462.41 mt in 2013-14 to 606.89 mt in 2018-19, an absolute increase of 144.48 mt as compared to an increase in coal production of 58.68 mt between 2008-09 and 2013-14.

The all-India coal production target has been fixed at 810 mt for 2019-20, of which CIL accounts for 660 mt, Singareni Collieries Company Limited (SCCL) for 67 mt and the others for 83 mt.

During the five years 2014-15 to 2018-19, coal imports increased at a compound annual growth rate of 1.96 per cent, as compared to 22.86 per cent between 2009-10 and 2013-14.

Iron ore

Iron ore production increased at a compound annual growth rate of 12.55 per cent between 2014-15 and 2018-19. In 2018-19, iron ore production stood at 207 mt, an increase of 16.2 per cent over the previous year. About 74 per cent of the country’s iron ore is high-grade haematite, with Fe content of more than 63 per cent, one of the best in the world. Domestic supplies are likely to grow substantially in 2020 as non-captive miners will maximise production (due to mining leases expiring in March 2020). NMDC Limited is the largest producer of iron ore in the country with a share of 18 per cent in 2017-18. With regard to consumption, the figure stood at 166 mt, 175 mt and 189 mt during 2016-17, 2017-18 and 2018-19 respectively.

On December 6, 2019, the Odishagov-ernment released a notice inviting tenders for 20 iron ore and manganese blocks. An analysis of the winning bids shows interesting results. Aggressive bids have been witnessed for both large and small mines, with premiums ranging from 90 per cent to 140 per cent. High premiums are likely to increase iron ore prices, at least in the short term.

Lignite

As of April 1, 2018 (the latest estimates available), the total known geological reserves of lignite stood at about 45.66 billion tonnes (bt), of which 79 per cent (about 36.135 bt) is located in Tamil Nadu. NLC India Limited is the country’s major producer of lignite with a share of about 55 per cent. The company’s share in total lignite production, however, has fallen from around 61 per cent in 2016-17. In terms of production, there has been a decline in the total quantity of lignite produced by NLC. In 2018-19, the company’s total lignite production stood at 24.2 mt, as compared to 25.15 mt in 2017-18 and 27.61 mt in 2016-17. Meanwhile, the Gujarat Mineral Development Corporation (GMDC), the largest merchant seller of lignite in the country, produced 9.19 mt of lignite in 2018-19 from its six active lignite mines.

Bauxite   

During 2018-19, the total alumina production in the country was 6.5 mt, a year-on-year growth of 3.5 per cent. Of this, National Aluminium Company Limited (NALCO) accounted for 2.11 mt (32 per cent). During 2018-19, consumption of aluminium grew by 9.7 per cent.

NALCO is the major producer, producing 7.23 mt, 2.15 mt and 0.44 mt of bauxite, alumina hydrate and aluminium, respectively, during 2018-19. Vedanta Resources, Hindalco Industries and GMDC are other key players in the bauxite segment.

Copper

Copper is one of the most used metals in the country for industrial and other allied uses in the electrical/electronic, building/construction, transportation, industrial machinery and equipment, copper-based alloys and process industries. The annual refined copper consumption stood at 0.69 mt in 2018-19, as compared to 0.65 mt in 2017-18.

The import of refined copper increased from 44,245 tonnes in 2017-18 to 92,290 tonnes in 2018-19. Since exports declined from 378,555 tonnes in 2017-18 to 47,917 tonnes in 2018-19, it resulted in net imports of 44,373 tonnes in 2018-19 from net exports of 334,310 tonnes in 2017-18. During the corresponding period, domestic production declined largely due to closure of a smelter (with an annual capacity of 0.4 million tonnes per annum) since May 2018.

Zinc and lead

Total reserves of lead and zinc ore as of April 1, 2015, stand at 749.46 mt. Of this, 106.12 mt falls under the reserves category, while the balance 643.34 mt is classified as “remaining” resources. Meanwhile, the total lead metal reserves stand at 13 mt, zinc metal stands at 36.36 mt.

Hindustan Zinc Limited is the largest zinc producer in the country with a 79 per cent market share in 2018-19. The company also has a 57 per cent market share of domestic primary lead consumption.

Conclusion

With the government’s consistent efforts in the development of the mining sector as well as the untapped potential that the industry offers, the mining sector is poised to make significant strides in the years to come. The release of the long-awaited National Mineral Policy, 2019, coupled with other supportive measures and a robust project pipeline bodes well for the sector in the time to come.

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