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A
Mining Summit
for Mutual Benefit
A two-day 'Global
Mining Summit',
which is being
be held in Kolkata
on 6 and 7 November,
2008, will showcase
the mineral-rich
India as the ideal
destination for
investment. This
Summit is being
held concurrently
with the 9th International
Mining and Machinery
Exhibition 2008.
According to the
Confederation
of Indian Industry
(CII), organizers
of the Summit,
the country's
mining sector
is gearing up
to play a pivotal
role in supporting
India's accelerated
annual economic
growth, averaging
at a high of 8-9
percent in recent
years. The Summit
is supported by
the union ministries
of Mines and Coal.
With a high economic
growth rate, India
has emerged as
one of the most
energy-hungry
countries and
a much sought
-after investment
destination for
global corporations,
CII said. Stimulating
investment in
public and private
sector in exploration
and production
of minerals has
therefore assumed
strategic importance
for the country,
it added.
India is a globally
leading mineral
producer endowed
with a rich resource
base of several
major minerals
like coal, iron
ore, bauxite,
etc. The country
offers an unmatched
opportunity to
both domestic
and global companies
to tap its potential.
The growth forecasts
in the end-use
sectors across
the country, when
combined with
the large export
market potential,
suggest a vast
market opportunity
for investors
in the mining
sector.
To support and
sustain high economic
growth, the country
will need investments
to the magnitude
of $11.5 billion
in the mining
sector. Against
this massive investment
requirement, Foreign
Direct Investment
(FDI) of $ 1 billion
has already been
approved in the
mining sector
up to 2006.
Recognizing the
pivotal role of
the mining sector
in supporting
the accelerated
economic growth,
the rapid development
of the sector
has come into
sharp focus. Investment
requirements over
next five to ten
years in some
of the key mining
sectors are: coal
mining $30- 40
billion; metal
ore $15 billion,
mining equipment
$5 billion;
India is the world's
largest producer
of mica blocks
and mica splittings.
With the recent
spurt in world
demand for chromite,
India has stepped
up its production
to reach the third
rank among the
chromite producers
of the world.
Besides, India
ranks 3rd in production
of coal &
lignite and barytes,
4th in iron ore,
6th in bauxite
and manganese
ore, 10 in aluminium
and 11th in crude
steel in the World.
Besides these
natural resources,
India also hosts
significant reserves
of copper, zinc,
gold and about
26 other metallic
and minor minerals.
India has 2600
operating mines
with 2300 in the
private sector.
This will mean
opening up of
business opportunities
on an unprecedented
scale, not only
for investments
in the sector
but also for providing
technology in
exploration, mining
and associated
activities. As
India gets ready
to ramp up investments
in the mining
sector, the world
mineral scenario
is also fast-witnessing
significant changes.
Not only have
the world markets
seen growing global
demands for metals
& minerals
and consequently
high prices but
policy & regulatory
environments in
almost all resource
rich nations have
also seen dynamic
changes, making
them more investor
friendly. India
is thus competing
with other resource
rich countries
to attract investments
in the mining
sector. Government
of India is actively
engaged in policy
debates taking
policy liberalization
process far beyond
allowing 100 percent
foreign direct
investment in
the sector. It
needs to address
specific challenges
in policy; procedures
for permits, clearances,
licenses and land
acquisition; infrastructure;
funding; technology
and environment.
India's mining
industry continues
to grow in economic
importance. In
June 2008, a report
from financial
services company
Edelweiss predicted
that the industry
should reach a
size of almost
$30 bn by the
end of the 2012
fiscal year a
figure equivalent
to around 2.5
percent of GDP.
The report noted
that India has
significant amounts
of natural resources,
which should allow
it to develop
a world-class
mining industry.
However, the report
also underlined
the fact that
India would need
to bring in a
more conducive
regulatory framework
and attract further
investment in
exploration, mine
development and
infrastructure
in order to allow
the full potential
of its mining
industry to be
realized.
In a positive
move for the sector,
in March 2008,
the Indian cabinet
approved the National
Mineral Policy
(NMP) 2008, which
should do much
to boost foreign
direct investment
(FDI) in mining.
At the same time,
the cabinet also
approved the setting-up
of an independent
dispute resolution
tribunal to be
known as the Mining
Administrative
Appellate Tribunal.
The approval of
a NMP will be
a clear boon for
the sector.
The Indian mining
sector is largely
state-dominated,
but the government
is now seeking
a phased withdrawal
of its participation
from the non-strategic
metal sector in
order to encourage
private players
to take the centre
stage. India's
economic prospects
and rich geology
have long captured
the interest of
foreign companies.
However, the presence
of foreign mining
firms whose investments
would help upgrade
the Indian mining-related
technology is
low. A new and
much anticipated
mining policy
is on the horizon.
It seeks to ease
excessive bureaucratic
influences while
issuing or transferring
mining leases
and permits.
The policy also
aims to encourage
domestic and overseas
players to invest
in the exploration
of precious metals.
In addition, the
government is
taking active
steps to encourage
foreign investment
in the mining
industry, with
the investment
target for 2007-2009
pegged at US$22.37bn.
Non-uniformity
of rules and regulations
across the country
characterizes
Indian mining
laws. The states
hold the sole
licensing authority
for most minerals,
except for iron
ore and uranium,
which require
prior consent
from the central
government. States
can also create
their own qualifying
conditions and
most of them hold
discretionary
powers to terminate
a mining lease,
or to take ownership
of a mine on grounds
of non-performance,
or environmental
or labour-related
reasons.
The pace of new
exploration initiatives
in the Indian
mining industry
has been rather
slow often as
a result of excessive
paperwork and
confusing regulations.
The new mining
policy is expected
to address these
gaps in the industry
and encourage
private players
to go beyond exploring
traditional minerals
to fully leverage
the richly endowed
natural diversity
of the country.
India's mining
industry is forecast
to log an average
growth rate of
8.1 percent over
2008-2012, to
be valued at US$74.6bn
by 2012.
In recent years,
several corporate
initiatives have
also been undertaken
to integrate with
the global mining
industry in terms
of inflow of technology
and best practices.
Against this backdrop
CII's Global Mining
Summit is being
held. The summit
will be a unique
forum for all
the stakeholders
- policy makers,
investors, lenders,
producers, buyers,
traders, equipment
manufacturers,
mining professionals
and experts to
assemble on a
single platform,
to interact with
each other and
to discuss possible
business opportunities.
The objectives
of the Summit
are:
• To showcase
the large-scale
business opportunity
in India's mining
sector.
• To discuss
next-generation
policy, procedural
and regulatory
initiatives needed
to attract investments
in India's mining
sector.
• To highlight
best practices
in exploration
and investments
with a view to
making Indian
mining sector
globally competitive.
• To provide
a platform for
exchange of views,
ideas and business
opportunities
among the global
and domestic industry
participants.
• To provide
a platform for
technology upgrade
and joint ventures
for equipment
manufacturers.
The summit will
have several technical
sessions on:
• India's
Mining Sector-Policy
and Regulatory
imperatives for
accelerating investments
• Making
mining infrastructure
happen in India
• Making
Indian mining
industry globally
competitive
• Business
opportunities
in India - Understanding
best practices
in technology
and mine operations.
Focus on (a) coal,
(b) metallic minerals,
(c) non-metallic
minerals.
• Parallel
sessions on optimizing
material handling
a) Need for focusing
on exploration
and b) Bringing
Sustainability
in mining ore
processing.
• Financing
options and strategies
for supporting
large investments
in India's mining
sector.
• During
the summit, a
buyer-seller meeting
and one-to-one
meeting with prospective
investors will
take place concurrently
on the first day
afternoon.
The CII works
to create and
sustain an environment
conducive to the
growth of industry
in India, partnering
industry and government
alike through
advisory and consultative
processes.
CRISIL Infrastructure
Advisory; infrastructure
consulting business
of CRISIL Limited,
a Standard &
Poor's company
and India's leading
ratings, research,
risk and policy
advisory company
is the knowledge
partner for the
summit.
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