VMR Mining Update: Make In India

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India will be a “star performer” among emerging market economies and is ex-pected to clock 7.7 percent growth in 2016, outshining China for the second consecutive year, a PwC report says.

According to the global consultancy firm, of the emerging economies, only In-dia is expected to grow faster in 2016 than its long-term average growth rate.

Among the seven emerging economies (China, India, Brazil, Mexico, Russia, In-donesia and Turkey), India will be a “star performer”, while the Brazilian and Russian economies will contract and China will slow down, the report said.

“For the second year in a row, we expect India to grow faster than China, ex-panding by around 7.7 percent in real terms,” it said.

While the G7 economies (the US, the UK, Japan, Germany, France, Italy and Canada) are expected to grow at fastest rate since 2010, led by the first two, the E7 emerging economies will grow slower than their trend rate (but still faster than the G7).

“We expect the US recovery to switch into a higher gear in 2016, while the UK will also enjoy continued consumer-led growth. We should also see at least the beginning of the end of the Eurozone crisis. The once-mighty BRICs, however, will have another tough year in 2016, with the notable exception of India,” PwC UK Chief Economist Mr. John Hawksworth said.

According to PwC, the Chinese GDP growth will ease to 6.5 percent in 2016, as growth in manufacturing and exports will continue to slow gradually. The re-port further noted that India will continue to reap the benefits of recent re-forms.

“The cut in the policy rate by the Reserve Bank of India from 8 percent to 6.75 percent last year will help support consumption and investment growth this year,” PwC said, adding that FDI in the country’s “underdeveloped” manufac-turing sector should also pick up as foreign investment caps have mostly been lifted.

Geopolitics, rather than economics, will be at the top of policymakers’ agendas, the report noted.
The migrant crisis in Europe, the response of the in-ternational community to the crisis in the Middle East and the referendum on the fate of the UK’s membership of the European Union, will be the three major geopolitical issues to dominate the news head-lines.

Meanwhile, commodity prices are expected to re-main lower for longer.
“This will be a good news for most businesses, house-holds and policymakers in commodity importing economies, but a challenge for countries that rely heavily on commodity exports,” the PwC report added.

(Source – The Financial Times, 10-January-2016)

India will continue to be the bright spot of the global economy and is projected to grow at a robust 7.8 per cent in fiscal 2016-17, more than a percentage point higher than China's, according to the World Bank.

In its latest Global Economic Prospect report - which is released every six months -- the World Bank marginally reduced India's growth rate - 0.2 per cent in 2015 and 0.1 per cent in both 2016 and 2017.

However, India continues to be the bright spot of the global economy as Chinese growth is projected to slow further. India, the dominant economy in Asia, is projected to grow by a robust 7.8 per cent this year and 7.9 per cent in the next two years.

The World Bank estimates that China grew at an estimated 6.9 per cent in 2015 (0.3 per cent less than its June projection).

According to the report, China is estimated to grow at 6.7 per cent in 2016 and 6.5 per cent each in 2017 and 2018. The growth rate projection is 0.3 per cent in 2016 and 0.4 per cent in 2017. Russia and Brazil are expected to remain in recession in 2016.

"In contrast to other major developing countries, growth in India remained robust, buoyed by strong investor sentiment and the positive effect on real incomes of the recent fall in oil prices," the World Bank said.

India's currency and stock markets were largely resilient over the past year, even during bouts of volatility in global financial markets, the report said.

Reserve Bank of India, it said, has rebuilt reserves while net FDI flows have remained positive. Ongoing fiscal consolidation in India has reduced the central government's fiscal deficit to close to 4 per cent of GDP (on a 12-month rolling basis), down from a peak of 7.6 per cent in 2009.

In the report, South Asia is projected to be a bright spot in the outlook for emerging and developing economies, with growth speeding up to 7.3 per cent in 2016 from 7 per cent in the year just ended.

The region has smaller trade links with China than other regions, and is a net importer of oil and will benefit from lower global energy prices. Pakistan (on a factor cost basis) is expected to accelerate to 4.5 per cent, the report said.

According to the report, weak growth among major emerging markets will weigh on global growth in 2016, but economic activity should still pick up modestly to a 2.9 per cent pace, from 2.4 per cent growth in 2015, as advanced economies gain speed.

"More than 40 per cent of the world's poor live in the developing countries where growth slowed in 2015," said World Bank Group President Jim Yong Kim.

"Developing countries should focus on building resilience to a weaker economic environment and shielding the most vulnerable. The benefits from reforms to governance and business conditions are potentially large and could help offset the effects of slow growth in larger economies," he said.

Global economic growth was less than expected in 2015, when falling commodity prices, flagging trade and capital flows, and episodes of financial volatility sapped economic activity.

Firmer growth ahead will depend on continued momentum in high income countries, the stabilisation of commodity prices, and China's gradual transition towards a more consumption and services-based growth model.

Developing economies are forecast to expand by 4.8 per cent in 2016, less than expected earlier but up from a post-crisis low of 4.3 per cent in the year just ended.

"There is greater divergence in performance among emerging economies. Compared to six months ago, risks have increased, particularly those associated with the possibility of a disorderly slowdown in a major emerging economy," World Bank Group Vice President and Chief Economist Kaushik Basu said without naming any country.

"A combination of fiscal and central bank policies can be helpful in mitigating these risks and supporting growth," he said.

(Source: NDTV Profit, January 7, 2015)

India's economic landscape is expected to undergo a major transformation over the next decade and is likely to achieve an average growth rate of around 8.8 percent, a Dun & Bradstreet report says.

According to the report, this increase in growth rate would culminate into high per capita income over the years.

"We believe India has the potential to achieve a higher growth rate, given its domestic fundamentals, D&B said in a report titled 'Manufacturing India 2025' which outlines the country's growth journey during the next decade. We expect India to realize its potential and achieve an average growth rate of around 8.8 percent during the next decade," it said adding that with this, India's nominal GDP is expected to touch $3.4 trillion by 2019-20 fiscal and further to around $7.0 trillion by 2024-25 fiscal.
The report, however, cautioned that in case of a delay or failure to implement key policy reforms, nominal GDP might reach to $6.2 trillion by 2024-25.

The new mode of governance, a pro-business policy framework, improved business environment through simplifying processes, focus towards decentralized planning and greater empowerment of states, the demographic dividend and the rise of the middle class have enabled India to emerge as one of the global economic powers on the world map, the report said.

The report further said while services sector would continue to drive India's growth momentum, the industrial sector is expected to witness double-digit growth.

Along with 'Make in India' Programme, other initiatives such as Digital India, developing Smart Cities and urbanization if implemented conscientiously will change the dynamics of Indian economy in next decade, Dun & Bradstreet India Senior Economist Mr. Arun Singh said.

The report further said the goal of raising the share of manufacturing to 25 percent of GDP would require conducive business environment, investment to support innovation, capital and labor efficiency amongst other measures.

Besides improvement in industrial and ICT infrastructure, strong supply chain and competitive infrastructure, focus on health and skill development are required which will not only support industrial development but also other segments of the economy, it added.

(Source – Assorted with the Inputs from PTI)

for more live update you can visit wwwVirginiamr.in

Last Week Top Headlines of Power Sector....

The 4,000 MW Tilaiya ultra mega power project (UMPP) in Jharkhand, abandoned by Reliance Power, is likely to be auctioned afresh as most of its consumers want to avoid litigation. In the meeting held last Tuesday, the procurers of Tilaiya UMPP generally appreciated that paying the Rs 125 crore compensation as per the contract will be the best solution in the interest of the project as legal recourse will only delay it. After paying off the company, the procurers can re-bid the plant.

Construction of two 700-MW nuclear power units at the Rajasthan Atomic Power Station (RAPS) is progressing fast and preparatory work to install the coolant channels was on. Welding of end shield and calandria is over. Preparation work for core components - coolant channels - has started. It will take six months to complete.

National Green Tribunal (NGT) has issued notices to NTPC and Bridge and Roof Company (India) Ltd for alleged illegal excavation of sand for construction of 1,600 MW thermal power station at Gardarwara in Narsinghpur district of Madhya Pradesh.

The tariff for electricity generated by the Kudankulam NPP will remain at the level set by the Indian Government in 2010 – 2011, with no hikes, Russian State Atomic Energy Corporation "Rosatom" has said.

The Mahanadi Coalfields Ltd (MCL) would set up a 1,600-MW super critical thermal power plant with a total capital investment of Rs 11,363.18 crore at Basundhara in Sundargarh district.

NTPC will invest over Rs.5,000 crore on expansion of Simhadri Super Thermal Power Station near Parawada. The district administration has been approached for allotment of site required for the Brownfield project.

Solar manufacturer and solutions provider Waaree Energies Ltd commissioned a 27.5-mw DC solar power plant for Roha Dyechem Pvt Ltd at Bhadla solar park in Rajasthan.

The central government will bail out close to 21,400 MW of power plants by assuring coal linkage through new fuel supply agreements (FSAs). These plants comprise the power projects whose commissioning date was delayed due to several reasons, including fuel supply crunch. Of this, 2,415 Mw would get tapering linkage and rest would be long-term linkage.

Odisha state government hopes to bag the Baitarani West coal block soon for its PSU, Odisha Thermal Power Corporation (OTPCL), a 50:50 joint venture between Odisha Mining Corporation (OMC) and Odisha Hydro Power Corporation (OHPC).

The government is likely to allow companies to divert coal supply to efficient power plants from inefficient plants to generate more electricity with the available fuel.

Coal imports dropped by 27.16 per cent to 12.6 million tonnes (MT) last month from a year-ago period on the back of rise in domestic production.

The Coal Ministry has made a one-time exception to allow captive power plants to participate in the e-auction for coal by Coal India.

In light of there being sufficient coal stocks at thermal power plants across India, producer Coal India Limited (CIL) has been granted greater flexibility in offering higher volumes for sale through e-auction.

Relaxing earlier restrictions, an expert panel of the environment ministry has recommended a two-fold increase in the ash content of imported coal from 12% to 25%, giving in to demands of the Association of Power Producers (APP), who are highly dependant on the imported fossil fuel.

Of the two key power transmission projects put up for tariff-based competitive bidding (TBCB), state-owned Power Grid Corporation of India (PGCIL) won the Rs 7,032-crore Vemagiri-II transmission project, one of the costliest projects to come under the bidding route this year.

Of the two key power transmission projects put up for tariff-based competitive bidding (TBCB), Kalpataru Power Transmission bagged the second project — the Rs 2,240-crore Bhutan inter-link. The project, based in West Bengal, would help in evacuation of power from upcoming hydro projects in Bhutan.

Renewable energy firm Gamesa has bagged a 100-MW wind power project from Hero Group to set up 50 wind turbines in Madhya Pradesh.

Virginia Mining Resources would be closely tracking the developments on the subject and other events in the mining & resource sector and bringing you the same.

Rating agency Moody’s said India is less exposed to global risks among emerging market economies because of its more resilient economic growth and the impact of positive policy reform momentum.

A Moody’s report says trends in global capital flows have caused Brazil and Turkey to register the sharpest exchange rate depreciation and loss of reserves in the first half of 2015, while India proved comparatively resilient to these market developments.

Emerging market (EM) sovereigns have diverging shock-absorption capabilities to withstand the risks that will continue to impact global credit quality in 2015-16, the report said.

Moody’s said the main external risk facing EMs is the potential for a prolonged risk aversion, prompted by hopes of normalization of the US monetary policy and possibility of a sharper-than-expected slowdown in China’s growth.

The report focuses on five Baa-rated sovereigns — Turkey, Brazil, South Africa, India and Indonesia.

“India is less exposed to external shocks than the other sovereigns discussed here. The positive outlook on its Baa3 rating reflects our view that the relatively resilient growth and the policy reform momentum will slowly stabilize inflation, improve the regulatory environment, increase infrastructure investment and lower government debt ratios,” it said.

“In contrast, we forecast strong growth in India of around 7-7.5 percent per year in 2015-16, the highest among the G20 economies, which is supported by lower oil prices that will reinforce gradual growth enhancing reforms,” it said.

Moody’s said although India, South Africa and Brazil had weaker fiscal positions than Turkey and Indonesia, these governments were less reliant on foreign currency and non-resident funding (government external debt).

The rating agency made a special mention of India’s significant monetary tightening in 2013, coupled with some fiscal consolidation, which is “an example of effective macroeconomic management that restored macroeconomic stability, albeit at the expense of near-term growth”.

(Source – Assorted with the Inputs from PTI)

for more live update visit Virginia Media and Research

Finance minister Mr. Arun Jaitley on Saturday said the country's current ac-count deficit has come down substantially to around 1.3 percent of GDP in 2014-15, as against around 4.8 percent two years earlier. Besides, he said while the country was suffering from double-digit inflation then, this has dipped to a low of 3.7 percent, an official statement said.

In his lead intervention in the plenary session of the International Monetary Fund's (IMF) International Monetary and Finance Committee on Friday, he said India is utilizing the regime of lower oil and commodity prices to in-crease investments in infrastructure and irrigation as well as to undertake comprehensive subsidy rationalization and successfully roll out the world's largest financial inclusion initiative under which around 185 million bank accounts have been opened.

Due to the large number of initiatives underway encompassing multiple areas of intervention and reforms, Mr. Jaitley expressed optimism that India would continue to record higher level of growth. He emphasized that the IMF would be constrained in meeting its obligations if the IMF Quota and governance reforms are not implemented expressing concern at the unprecedented delay in implementation of the 14th General Review of Quotas.

Mr. Jaitley also said that the global economic outlook outlined by the IMF does not look particularly encouraging as it has bearing on India's exports. Consisting of 24 members who are finance ministers, central bank governors or others of comparable rank, the IMFC is a key body providing strategic direction to the work and policies of the IMF.

(Source – IANS, 10-October-2015)

Directorate General (Safeguards) has recommended provisional safeguard duty of 20% ad-valorem for period of 200 days on imports of hot-rolled flat products of non-alloy and other alloy steel in coils of a width of 600 mm or more into India with immediate effect.

“On the basis of analysis of the application filed by the domestic industry and the injury parameters it is observed that the domestic industry is suffering serious injury/threat of serious injury in respect of market share, profits/losses, inventory, decline in domestic selling prices etc,” Directorate General said in a release today.

There exists critical circumstances, where any delay in application for provisional safeguard measures would cause damage which would be difficult to repair, Vinay Chhabra, director general at Directorate General of Safeguards was quoted as saying.

Directorate General (Safeguards) had initiated a safeguard investigation on imports of hot rolled alloy and non?alloy flat steel coils on an application jointly filed by Essar steel, JSW steel (JSTL) and SAIL, accounting for more than 50 percent of India’s total production of said products.

So far, in a bid to protect the domestic steel industry, government has hiked the steel import duty twice, in August by 2.5 percent and in June by another 2.5 percent taking the total import duty to 15 percent from 10 percent earlier.

Imposition of safeguard duty will bring Free Trade Agreement (FTA) countries like Japan and Korea also into the duties' net, which was not the case earlier when import duty was hiked as the latter was meant more for other countries such as China and Russia.

Are you too caught up with latest happenings in Greece? Worried about its financial repercussions on Indian markets and economy? Its time you shift your focus! A bigger threat is playing out right next door, in China. After rising to historic highs, Chinese stock markets are witnessing an unabated free-fall since last month. This has raised fears of a stock market bubble. Some analysts have described the situation as the biggest stock market bubble since the dot-com boom of the 1990s.

Virginia Media and Research

We give you a lowdown of the situation in China and its possible effects on other countries, including India:

What is going on: Chinese markets were the best performing emerging market in the world last year. The country’s main index Shanghai Composite more than doubled and was up over 40% this year. This was until June 12. Since then, China stocks have plunged 30% in three weeks and to four-month lows. On June 8, in an unprecedented move, around 1300 companies—half of China’s listed companies, suspended their trades in the stock market. The move was taken to insulate themselves from the massive declines in the equity market.

Why markets crashed: Three main reasons are being cited for the dramatic fall:

Chinese stock prices were highly overvalued. The market continued to rise because of herd mentality—investors see others buying them, and so they buy those stocks too—and not its inherent fundamentals. There were fears that stock prices have reached unsustainable levels at a time the economy is not doing too well

A country’s stock market performance is directly correlated to its economic performance. However, there has been a worrying disconnect between the two in the case of China. Chinese economy is losing steam .Its GDP growth rate halved from 14% in 2007 to 7.4% last year. Investment and retail sales have also declined. This indicates that the markets were driven purely due to momentum and not the country’s inherent fundamentals.

Another reason for the sharp fall is the rise in margin trading. There has been a 5-fold rise in margin debt. In margin trading, an investor borrows money from his broker to purchase stocks. If the stock price falls below a certain level, then he will have to sell of some shares to pare the fall.

Wealth eroded: The rout in Chinese shares has erased at least $3.2 trillion in value, or twice the size of India’s entire stock market, according to Bloomberg. The wealth alone is equal to 10 times the size of Greece economy!

China government intervenes: The Chinese government has intervened to stem the fall. The stock market regulator has suspended initial public offerings (IPOs) for the time being. The country’s central bank cut deposit and lending rates , its fourth rate cut since November. The steps were taken as a response to the weak economic data and to inject more liquidity in the markets. However the move has proven counter-productive till date. Investors seem to be losing faith on the Chinese government.

Effect on India: India could feel the heat of the turmoil in China. The Sensex slumped 1.7% on Wednesday. However, analysts view the fall as a temporary shock. They are of the opinion that the fall in China is good news for India. With, the turmoil in Chinese markets, India could be the next best favourable investment destination. A flight of capital from China to India is a possibility in the future.

However, if the turbulence in Chinese markets spills over to its economy, India could be in trouble. This is because China is India largest trading partner. A turmoil in the Chinese economy and markets would mean businesses could pull back from investments till the situation stabilizes.

Contra view: Some analysts are of the opinion that the market crash is temporary and there is no bubble as such. The valuations are not too high as projected. The Chinese economy has clocked in remarkable growth for years. While its markets slumped after the Lehman crisis of 2008, it is reaching its correct valuations now.

(Source: Simplus Information Services – Fri 10 Jul, 2015)

Keeping its projections for India and China unchanged, the International Monetary Fund on Thursday forecast that India will grow a clip faster at 7.5 percent in 2015 and 2016, overtaking a slowing down China.

While India's GDP growth would go up from 6.9 percent in 2013 and 7.3 percent in 2014 to 7.5 percent over the next two years, China would slow down from 7.7 percent in 2013 and 7.4 percent in 2014 to 6.8 percent in 2015 and 6.3 percent next year, IMF said.

The July update of the April 2015 World Economic Outlook (WEO) predicting a slower growth in emerging markets and a gradual pickup in advanced econo-mies projected global growth at 3.3 percent in 2015, marginally lower than in 2014.

In 2016, growth is expected to strengthen to 3.8 percent, the report said attributing the small onward revision to global growth for 2015 to a setback to activity in the first quarter of 2015, mostly in North America.

Nevertheless, the underlying drivers for a gradual acceleration in economic activity in advanced economies "easy financial conditions, more neutral fiscal policy in the euro area, lower fuel prices, and improving confidence and labor market conditions" remain intact, the report said.

In emerging market economies, the continued growth slowdown reflects several factors, including lower commodity prices and tighter external financial conditions, structural bottlenecks, rebalancing in China, and economic distress related to geopolitical factors, it said.

Growth in advanced economies is projected to increase from 1.8 percent in 2014 to 2.1 percent in 2015 and 2.4 percent in 2016, a more gradual pickup than was forecast in the April 2015 WEO.

The IMF also maintained its forecasts for a pickup in growth in the euro zone, despite Greece moving ever closer to the edge of default and an exit from the currency bloc as it races to find a last-minute third bailout. "Developments in Greece have, so far, not resulted in any significant contagion," the IMF said. "Timely policy action should help manage such risks if they were to materialize."

The unexpected weakness in North America, which accounts for the lion's share of the growth forecast revision in advanced economies, is likely to prove a temporary setback, the update said.

Growth in emerging market and developing economies is projected to slow from 4.6 percent in 2014 to 4.2 percent in 2015, broadly as expected. In 2016, growth in emerging market and developing
economies is expected to pick up to 4.7 percent, largely on account of the projected improvement in
economic conditions in a number of distressed economies, including Russia and some economies in
the Middle East and North Africa.

The projected pickup in global growth, while still expected, has not yet firmly materialized, according to the WEO update.

Raising actual and potential output through a combination of demand support and structural reforms
continues to be the economic policy priority, the report said.

Efforts at implementing structural reforms remain urgent across advanced economies, both to tackle
crisis legacies and to raise potential output.

In emerging market and developing economies, macro-economic policy space to support demand is generally more limited but should be used to the extent possible, the report said.

Structural reforms to raise productivity and remove bottlenecks to production are urgently needed in
many economies, the update suggested.

(Source – IANS, 09-July-2015)

India will contribute $18 billion to the 100 billion dollar foreign-exchange re-serves pool that is currently being established by the BRICS group in order to help member nations "in case of any problems with dollar liquidity."

Brazil, Russia, India, China and South Africa have signed an agreement to set up the USD 100 billion pool, with maximum USD 41 billion coming from China. India's contribution of USD 18 billion to the Pool will be same as that of Brazil and Russia. South Africa would chip in USD 5 billion.

"The central banks of Brazil, Russia, India, China and South Africa have signed Operational Agreement on July 7, 2015 in Moscow. The Agreement outlines the terms of mutual support for member states in the framework of the Agreement on BRICS Pool of Conventional Currency Reserves," the Russian Central Bank said in a statement.

The fund will be an "insurance instrument" that members nations could draw on if they experience problems with their balance of payments. The Pool will go into force on July 30.

The Operational Agreement details the working procedures of the Pool to be observed by BRICS central banks, and defines their rights and obligations.

"The Pool is tasked to ensure mutual provision of US dollars by the central banks of BRICS members in case of any problems with dollar liquidity. Thus, this new insurance network is designed to maintain financial stability of its member states," the statement said.

The Agreement on setting BRICS Pool of Conventional Currency Reserves was signed on July 15, 2014 at the summit in Fortaleza (Brazil).The agreement was signed in Moscow after a meeting of the Finance Ministers and heads of the central banks of the BRICS countries. The Pool would help BRICS members to maintain financial stability in case of volatility in dollar ex-change rate. India's foreign exchange reserves dipped by a mar-ginal USD 237.5 million, to USD 355.221 billion, in the
week to June 26 on account of slight decline in a key component, the Reserve Bank of India data showed.

The agreement on the insurance pool comes ahead of the two-day Summit of the BRICS leaders in the Russian city of Ufa. The Summit could look at the possibility of starting credit facility in local currency by the BRICS Bank.

The first head of the Bank is noted Indian banker Mr. K.V. Kamath. The BRICS nations account for nearly USD 16 trillion in GDP and 40 percent of the world's population.

(Source – Assorted with Inputs from PTI)

These firms are betting on India’s thrust on power production, infra development and indigenous manufacturing to raise the demand for minerals

Mining start-ups are mushrooming in India as the country aims to boost production of natural resources to spur economic growth.

These companies, offering technical assistance, consultancy, research and even financing services, are betting on India’s thrust on power production, infrastructure development and indigenous manufacturing to raise the demand for minerals such as coal, iron ore and bauxite.

“Mining for iron ore is only around 200 million tonnes (mt) while for coal it is about 400 mt. This will double in the next five-six years with the auctions and the provisions of the Mines and Minerals (Development and Regulation) Act,” said Monica Bachchan, director at Metalogics Projects Management Services Pvt. Ltd.

“Further, the potential for mining in the country is at over 500 billion tonnes, which will slowly open up in the following years,” Bachchan added. She and partner Bharti Mishra, both in their 20s, provide consulting and information services on mining and auctions.

Projecting similar growth, Virginia Mining Resources, a company started by former Indian Administrative Service officers and private mining industry experts in August 2014, sees mining-sector revenue at $30-35 billion in the next five years, from $5.5-7 billion now.

“With the slew of reforms expected to vitalize the sector, we believe a reasonable return on investment is expected, subject to conducive regulatory environment,” said Vineet J. Mehra, managing director of Virginia Mining Resources. “Our ultimate aim is to be a pure-play miner. We want to be another Rio Tinto originating from India.”

This start-up has clients such as Adhunik Metaliks Ltd, Adhunik Power and Natural Resources Ltd, GVK Power and Infrastructure Ltd, Dalmia Bharat Ltd, Essar America, Essar Algoma, Essar Power Ltd and JSW America to whom it provides consulting, exploration, project management, mine management, audit, financing, reclamation, equipment selection and other geological services.

“Contract mining is emerging as a good business opportunity,” said Rakesh Arora, managing director and research head at Macquarie Capital Securities (India) Pvt. Ltd. “With reforms in the mining sector, the growth rate is expected to pick up sharply and the need for specialist mining companies is going to increase.”

Two other start-ups have equally strong beginnings—one of them is already a coal block owner and the other got incorporated four years ago.

Araanya Mines Pvt. Ltd, incorporated on 12 January with a paid-up capital of only Rs.5 lakh, won the Lohari coal block in Jharkhand for Rs.2,438 a tonne in the government’s coal block auctions in March.

Veer Resources and Projects Pvt. Ltd, an early starter, was incorporated in May 2011 with a paid-up capital of Rs.1 lakh for mining and quarrying.

Thin margins

Competition is already intensifying in the sector owing to the sheer number of start-ups in the midst of larger companies such as the Aditya Birla Group’s Essel Mining and Industries Ltd and Adani Mining of the Adani Group.

“The big consultancies in this sector have dropped their tariffs, so the smaller ones like ours have to survive on minimal margins and at times with no profits,” said Bachchan of Metalogics. “We are sure that the market will open up soon and times will change for us.”

That said, companies still have rosy projections.

“We are expecting revenue of $10-12 million and we have a sufficient incoming order book to back it up,” said Mehra of Virginia Mining, which is bidding for two large mining projects in the country that would require it to raise significant debt.

Both Mehra and Bachchan said a special policy for junior miners and creation of a skilled workforce in the mining sector would be helpful for future growth.

According to data from the mines ministry, India has approximately 316 iron ore mines and 556 coal mines, several of which operate in the country’s central and eastern regions, bastions of Maoist rebels.

The mining sector has seen a turbulent past as many iron ore mines were closed until a few years ago owing to illegal mining and environmental degradation. Coal mines also saw troubled times as the Comptroller and Auditor General of India’s office accused the government of allocating coal blocks in an inefficient manner during 2004–09.

With legal challenges behind it, the government is pushing the sector to produce more so that India can be self-sufficient in minerals.

By Ruchira Singh, Livemint

30-6-2015

On the second day of the ET Global Business Summit (GBS), senior ministers of the Narendra Modi government provided details of their plans to back the prime minister's vision of upgrading India from a $2 trillion economy to a $20 trillion one. A day after Modi, as chief guest at the summit, outlined the vision, railways minister Suresh Prabhu and information technology and information minister Ravi Shankar Prasad made it clear that they wanted to overhaul their respective ministries and undertake a generational leap rather than carrying out incremental changes.

Attracting investment to expand the capacity of the railways which faced a cash crunch and ensuring digitization of government services for people who lived in the remotest corners of India were priority for the new government.

On Friday at the GBS, Modi had said that the country was making the transition from a "winter of subdued achievement" to a "new spring". He had also asked why India could not dream of making the transition from a $2 trillion economy to a $20 trillion one.

All in Support

The prime minister's ambition was repeatedly referred to by the ministers as well as representatives from some of the largest global and Indian companies. Prabhu reminded the audience that a slogan was a must before undertaking a major overhaul or even leading a movement for governance reform from within. He said the "Quit India" slogan given by Mohandas Karamchand Gandhi in 1942 and Subhash Chandra Bose's urging countrymen to shed the martyr's blood in return for freedom had played a significant role in India achieving independence. Lauding the prime minister for setting ambitious targets, Prabhu said that only a slogan that would resonate with people would trigger a movement which finally would lead to the achievement of a target.

Getting Back on Track

The minister pointed out that though the railways could make a huge contribution to the economy, its inability to invest in expanding capacity had ensured that the national transporter remained stuck in a vicious cycle of under-investment which in turn affected its ability to earn. The minister also said that the operating ratio of the railways was a major challenge.

"Investments in railways could boost the Indian GDP up to 3% in the next five years, apart from bringing in social benefits," said Prabhu.

Stating that there is no dearth of investors, the minister said that pension funds in Australia and Canada could be tapped to invest in railways provided a policy environment is created.

"If we want to increase the railway network by 30,000 to 40,000 km, we will need a huge investment. Also, we want to take the railways to the Naxalite-affected areas," he said. The minister hinted that a number of policy reforms may figure in his first Railway Budget to be presented next month, but refused to divulge the details. On the prime minister's call for making India a $20 trillion economy a day earlier in ET GBS, Prabhu said: "PM has already given a clear vision. I can just say: Yes, I will do".

Yes, We Can

The minister also emphasized that it was important to formulate policies that are ambitious and easy to implement at the same time.

Minister for telecom and information technology Ravi Shankar Prasad reiterated the importance of the government's Rs 1.13 lakh crore Digital India program which aims to offer government services to all Indians online and through smartphones by 2019.

The minister said the government will connect 250,000 gram panchayats within three years through the National Fibre Optic Network. The first 50,000 of these will be connected within this year under the Rs 20,000-crore project.

The minister said the government would strive to bridge the gap between the digital "haves" and "have-nots" and said such projects that centred on e-services would benefit the poor the most. "There will be pressure on governments to deliver through electronic delivery of services," he said.

There was also a huge urge among the people of the country to get digitally connected. The huge number of suggestions and feedback that the mygov.in portal receives is evidence of this, he said. The portal received over 7 lakh responses when suggestions were asked on cleaning the Ganga and on environment protection. Similarly, when a contest for designs for New Year e-greetings was announced, the portal received over 3,000 designs within a week.

Meanwhile, the government intends to ensure adequate availability of spectrum in the upcoming auction and beyond, as it is aware of the challenges that lack of the natural resource poses for the growth of the industry.

"What was pending with defence for the last seven to eight years has been cleared," Prasad said.

The comments come amid criticism from the industry and experts that the government is putting a limited amount of spectrum in the upcoming February auctions which will create artificial scarcity and push up prices for airwaves, in turn increasing the sector's debt to over Rs 300,000 crore.

In a special address, Union minister of state (independent charge) for power, coal and new & renewable energy Piyush Goyal said the government has no business to be in business. "The job of the government is to facilitate business so that no impediment comes in the way [of investment]," he said. He appealed to the captains of Indian industries to invest big time in India. "The whole world will invest in India only if Indians start investing in India," he said.

At a 'Make in India' session, DIPP secretary Amitabh Kant spoke about the government's thrust on industrial corridors and how those will transform the logistic business in India. "The container movement between Delhi and Mumbai now takes 13 days. Once the DMIC is built, it will take just 13 hours," Kant said.

(Source: The Economic Times, Jan 18, 2015)

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