INDIA 2018

Best of Germany 2014 - Mining Equipment and Mining Technology

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+INDIA 2018 India Mining Report As things stood now, the government promise of resolving legalities and get- ting Goa mines operational by December 2018 is unlikely to be met. Meanwhile the mines face uncertain closure, including large mines of Vedanta, and impacting a net loss of an estimated 2% of the resource major's consolidate annual revenues. Largest state-run iron ore producer, NMDC Limited has firmed up investments to the tune of $902 million over the next two years as part of its plans to increase production to 67 million mt/y against pres- ent production levels of 37 million mt/y. But the country's largest iron ore pro- ducer was unlikely to significantly increase volumes of raw materials for merchant sales to other steel producers considering that a large part of its projected incre- mental production would go in for cap- tive consumption for NMDC's 3-million-mt Greenfield steel mill located in central province of Chhattisgarh and scheduled to go into commercial production next fiscal. NMDC, one of the few Indian govern- ment owned company to have successfully taken controlling stake in an overseas company, is working to make its ASX listed Legacy Iron ore Limited, headquartered in Perth to spearhead its foray into base metals and gold and take up exploration across Australia. Legacy had made applications to gov- ernment of Western Australia seeking three exploration tenements for tungsten to add to its existing exploration across 19 other tenements Down Under. Bauxite Ironically, even with proven bauxite reserves of 3.5 billion mt, ranked fifth largest in the world, no mine has been developed in the country over the last several decades. And its long term impact is coming home to roost with domestic bauxite production falling over the last two consecutive year. During 2017-2018 bauxite produc- tion was estimated at 20.63 million mt, down 16% and the downtrend was clear- ly gaining momentum since production during 2016-2017 was 12% lower than previous fiscal. Most of the bauxite reserves in the country were located in predominantly forested areas across eastern India with predominant population of indigenous people leading to classic conflict between development and protection of local cul- ture and people. The biggest example being bauxite reserves in Niyamgiri hills in eastern Indian province of Odisha, earmarked for Vedanta's smelters in the region but caught in political crossfire between pro-development and environ- mental activists with the Supreme Court finally stepping in to ban mining in the region leaving Vedanta's smelters in lurch with no raw material. Vedanta's 1 million mt/y bauxite refin- ery at Lanjigarh Odisha and adjunct aluminum smelter starved of raw material since bauxite mining at Niyamgiri hills was banned might see light of day with the Odisha government moving rapid- ly to auction new bauxite mining lease and offering long term bauxite linkages based on competitive bidding for supplies from existing mines controlled by Odisha Mining Corporation, the mining arm of the local government. Early this year the local government had announced that 10 bauxite mining leases would be put up for auction but little has been heard since then. With bidding for these assets uncertain, Vedanta would therefore in all likelihood have to depend on bidding for supply linkages with OMC to ensure raw material security for its baux- ite refinery. Meanwhile even as it awaits for domestic raw material resources, the Anil Agarwal controlled resource major has decided to ramp up capacity of it alumina refinery to 6 million mt/y based on import- ed bauxite for which the company has reportedly tied up with Emirates Global Aluminum for global sourcing of the raw material. Post expansion, the Odisha alu- minum complex would required an estimat- ed 18 million ton of bauxite per annum. Nalco, the state-run aluminum com- pany, has lined up a capital expenditure of $164 million to part fund its plans to add a 1 million mt/y fifth stream alumina refinery, development of coal blocks for its captive thermal power plant after having achieved 100% capacity utilization of its existing alumina plant during the current year. But close to exhausting its captive bauxite operations at Panchpatmali hills, Nalco has commenced work on opening up a new bauxite deposit in proximity to its existing mining operations. The new mining face would just about enable the aluminum producer to maintain its require- ment of more than 6.8 million mt/y. However, Nalco's plans to construct a new aluminum complex in neighboring state of Andhra Pradesh has been caught in a limbo. Reason? Roadblocks to open- ing up a new bauxite mine. For over decades, indigenous pop- ulation at the proposed bauxite mine located in Andhra Pradesh, backed by various opposition political parties and even extreme-Left wing armed militants have been opposing development of the bauxite reserves. Copper Close to 30% of India's domestic demand for refined copper was currently being met through imports, given the inherent limitations in developing greenfield copper deposits across the country. Indian imports of refined copper was 250,000 mt during 2017-2018, up from around 65,000 mt during 2010-2011 with domestic demand for refined copper increasing at average 6%-7% per annum. Indian refined copper production during 2017-2018 was estimated at 843,000 mt compared to 798,000 mt in the previous fiscal with consumption during 2017-2018 pegged at around 660,000 mt. Indian refined copper prices have surged between 9%-15% since May 2018 when Sterlite Industries copper smelter in southern state of Kerala was closed down after police opened fire and killing 13 people among a mass of protestors against pollution created by the smelter in the region. Sterlite which produced 400,000 mt of refined copper based on imported copper ore was subsidiary of London headquartered Vedanta Resources and having about 33% share of domestic copper market. Hindustan Copper Ltd., sole integrated copper producer, with its own captive mines, has firmed up a corpus of $764 million to expand its existing copper mines aiming to increase production of copper ore to 20 million mt/y over the next five years from current level of 12.4 million mt/y. The company reported that it has completed almost 50% of development work at its Malanjkhad mines in central state of Madhya Pradesh and expending to commence production next fiscal which would give the company an incremental 500,000 mt/y of copper ore. HCL was also working on brownfield expansion of is Ghatsila mines in eastern India which the company in a statement reported held a potential of adding 1.5 million mt/y of copper ore production.

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