Mining Mix

Yield analysis of essential minerals in India

The metals and mining sector in India is undergoing expansion as a result of rapid infrastructure development and automotive production. India has vast mineral resour­ces, with mining leases granted for a 50-year period. The country had an estimated 1,229 reporting mines as of March 2021, including 545 metallic mineral mines and 684 non-me­tallic mineral mines.

According to recent statistics of the Indian Bureau of Mines, mineral production increased by 2.8 per cent in January 2022 over the previous year. The cumulative growth rate for the period April 2021-January 2022 over the corresponding period in the previous year stood at 14.2 per cent. Magnesite (36.6 per cent), lignite (25.2 per cent), bauxite (13.4 per cent), gold (13.3 per cent), natural gas (U) (11.7 per cent) and coal (8.2 per cent)  showed strong growth in January 2022 over the previous year.  The index of mineral production for December 2021 (Base: 2011-12=100) stood at 120.3, 2.6 per cent higher than the level in December 2020.

To help deliver India’s promise of 450 GW of non-fossil energy capacity by 2030, coal and lignite companies have planned to invest over Rs 150 billion in 5,560 MW of renewable energy capacity.

Silver is a vital component in the manufacturing of solar panels, and its increasing downstream businesses will play a significant role in the country’s transition to carbon-free energy. Meanwhile, storing this renewable energy will be critical, creating an enormous opportunity for recyclable lead-acid batteries.

Mineral-wise evaluation 

Copper: The Indian copper industry faced sluggish demand in the first quarter of 2021-22, down from 161,000 tonnes in the final three months of 2021. Demand is likely to rise gradually to a reasonable level over the next few qu­ar­ters with reducing Covid-19 instances and the country’s phased unlocking.

Significant operational disruptions in the Indian metals sector in general, and copper in particular, occurred in 2020-21 as a result of the Covid-19 pandemic-related lockdowns in the first two quarters. Stalled infrastructure projects, decline in automobile and component manufacturing, and a setback in white goods production contributed to a 24 per cent decline in copper consumption to 566,000 tonnes in the past year. Further, imports totalling 178,000 tonnes met 31 per cent of overall demand.

Due to copper’s sensitivity to macroeconomic events, the metal remains the finest measure of both the local and global econo­mies. Beyond the medium term, when the low base effect on the current demand has worn off, copper use in India is expected to grow at an annual rate of 8 per cent or more, fuelled by inc­reased demand from traditional sectors such as electrical applications, buil­ding and construction, and white goods such as air conditioners, refrigerators, and washing machines, as well as by a growing official focus on decarbonisation. For instan­ce, as the government prepares to gradually ramp up the manufacturing of electric vehicles, a significant copper app­li­cation sector will open up. Going forward, while zinc galvanisation adds to the co­nstruction of safer and stronger tracks, copper will be requir­ed to manufacture the overhead wires.

Coal: In December 2021, India’s total coal output climbed by 6.74 per cent to 74.78 million tonnes (mt) over 2019. Of the total production during December last year, Coal India Limi­ted (CIL) achieved a growth of 3.79 per cent by producing 60.22 mt.

Captive coal blocks posted a 40.98 per cent increase throughout the period, producing 8.91 mt of coal. Singareni Collieries Company Limited (SCCL) saw a negative growth of 1.12 per cent in December, generating 5.65 mt of coal.

Coal dispatch climbed 14.62 per cent to 75.05 mt in December 2021, up from 65.48 mt in December 2019. CIL increased production by 12.70 per cent during this period by dispatching 60.67 mt of coal, SCCL increased production by 2.01 per cent by dispatching 5.70 mt of coal, and captive blocks increased production by 43.23 per cent dispatching 8.68 mt.

The dispatch of electricity utilities inc­reas­ed by 20.06 per cent to 63.32 mt in December 2021, up from 52.74 mt in December 2019. Since the end of October 2021, the import pri­ce of coal has decreased. Further, the dema­nd for coal-fired electricity climbed by 12.7 per cent between November 2020 and November 2021. In December 2021, the total electricity generation was 8.32 per cent higher than that in December 2019.

In December 2021, coal-fired power generation totalled 85,579 million units (MUs), up from 75,620 MUs in the previous month, re­cording a 13.17 per cent increase. Of the top 35 coal mines, 11 generated more than 100 per cent while 12 produced more than 80 per cent but less than 100 per cent.

Zinc: The zinc concentrate output grew 18 per cent (1,648.00 thousand tonnes) year over year in financial year 2021. Vedanta Limited reported 214,000 tonnes of zinc production for the third quarter of the 2022 fiscal, up 17 per cent from the corresponding period in 2021 and 32 per cent from the second quarter of financial year 2022. Hindustan Zinc Limited’s integrated zinc output stood at 162,000 tonnes in the second quarter of 2021-22, down 10 per cent from the second quarter of 2020-21 and 14 per cent from the first quarter of 2021-22.

India produces over 700,000 tonnes of zinc per year, whereas demand for zinc is approximately 850,000 tonnes. Zinc consumption is closely linked to the demand for galvanized steel, which ensures that infrastructure lasts longer and is corrosion-resistant. Althou­gh 60 per cent of zinc produced is used in galvanising, the segment is still underutilised, and with increased demand for safer and more sustainable solutions, the market for galvanised products is enormous.

As a result of asset monetisation projects including railway modernisation and the NHAI asset monetisation programme as well as transmission lines controlled by the Power Grid Cor­poration, galvanised steel consumption is expec­ted to rise, ultimately driving up zinc demand.

Lead: The lead concentrate output increased 7.16 per cent to 376,924 tonnes in 2020-21, up from 351,746 tonnes in 2019-2020. How­ever, production fell to 299,545 tonn­es in 2021-22 (April-January) from 301,554 units in 2020-21 (April-January), a decline of 0.67 per cent. Mean­while, zinc and lead ore co­mbined increased from 14,479,032 tonn­es in 2019-20 to 15,455,343 tonnes in 2020-21, a rise of 6.74 per cent

The Indian lead acid battery market is expected to expand at a CAGR of 6.5 per cent between 2021 and 2027. The market has grown steadily in recent years, owing to rising consu­mer demand for two-wheelers and passenger ve­hicles, fuelled by the country’s growing urbanisation and residential and commercial sectors.

Bauxite: Bauxite production stood at 20,379,556 tonnes in 2020-21, down 6.62 per cent from 21,825,227 tonnes in 2019-2020. Bet­ween April 2021 and January 2022, bauxite output increased by 12.45 per cent to 18,317,429 tonnes, up from 16,289,735 tonn­es in 2020-21. Bauxite production in the state of Jharkhand increased 16.98 per cent to 1,464 tht in 2021-22 (April-January), up from 1,252 tht. Previously, it showed a 5.5 per cent increase to 1,497 tht in 2020-21, up from 1,419 tht.

Iron ore: India’s iron ore output increased to 143 million tonnes (mt) in the first seven mon­ths of the current fiscal year, and the country is on track to break the previous fiscal year’s re­co­rd of 246 mt. National Mineral Deve­lopment Corpo­ration Limited (NMDC), a state-owned en­terprise, produced 40 mt of iron ore in 2021-22. NMDC began with 4 million tonne in 1969-70, increased to 10 million ton­n­es in 1977-78, added another mt ton­ne capacity within a de­cade, and has recently surpassed the 40 million tonnes capacity.

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