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Positive moves
Says Rajesh Nath, Managing Director, VDMA India, ?The Advance Estimates for 2014-15 show a rise in industrial growth to 5.9 per cent as against 4.5 per cent in 2013-14. The key sectors contributing to the industrial growth are manufacturing, electricity, gas and water, and construction sectors. High growth in thermal generation, captive mining and capacity addition in electricity, coal and cement sectors boosted their performance to 9.7 per cent, 9.1 per cent and 7.9 per cent, respectively in 2014-15.?

Throwing light on the recent developments in the mining sector, Sanjay Ahuja, General Manager, Atlas Copco Mining and Rock Excavation Technique, says, ?The recent developments in Parliament where two Regulation Bills, Coal Mines Special Provisions Bill and Mines and Minerals Development (MMDR) Bill, were passed have provided a huge shot in the arm for the mining sector. This was sorely needed to boost the future prospects in the Indian mining industry as now sustained investments are envisaged over a long period of time. India has opened up coal mining to private sector after keeping most of it under state control for more than 40 years. Domestic and foreign companies (with Indian subsidiaries) will be allowed to commercially mine coal and sell it in the open market. Transparent auction of coal, bauxite, iron ore and other minerals will kickstart the economy and provide large-scale employment.?

Coal India has been directed by Government of India to double production of coal from the present level of 500 mt to 1,000 mt by 2019-20. According to Ahuja, most of this increase would happen via the surface mining segment and to achieve this, the volume of overburden to be removed would shoot up from 1,000 million cu m to 2,500 million cu m. This will result in greater utilization of existing deployed equipment while placing huge demands on the need to invest in additional mining equipment. Ahuja says, ?The approval of two Bills augurs very well for the mining industry as private investment is expected from Indian companies as well as global mining giants. This is also expected to introduce world-class mining practices including high technology resulting in cost-effective volume mining which would compete with Coal India in the commercial space. We also envisage investments in minerals other than coal, for eg, iron ore and bauxite.?

Speaking about the positive developments in the mining sector, Samir Bansal, General Manager-India, Off-Highway Research, says, ?Development of infrastructure and ?Make in India? initiative will increase the demand for coal, metals and minerals. In addition to generating a huge amount of money for the government, coal blocksauctions would have a positive impact on the mining equipment demand, as the bidders would try to recoup the investment through enhanced production. It is also evaluating the possibility of replacing imported bitumen with locally produced cement for road construction, which would give a major boost to the cement demand in the country.?

He adds, ?Other positives are expected in the form of legislative reforms such as Mines and Mineral (Regulation and Development) amendment, Coal Mines (Special Provisions) and Land Acquisition bills. Forest and environmental clearances are being given on priority and the pending litigations in mining sectors are also being reviewed for speedy settlements.?

Says Jayaram S Kousik, Vice President - Geotechnical & Mining Division, Maheshwari Mining, ?With the government initiating coal block allocations and related activities, there is some momentum in the mining sector. It is a good sign of increased activity in mining, however, a steady movement will be visible only by 2017.? Shedding light on the ground realities, Kousik says, ?Though coal blocks have been allotted, there are many clearances and other procedures to go through before the actual mining work starts. Mining is an operation which takes a long gestation period and it is imperative to clear all the litigations and hurdles that are hindering operations. Before we get into the process of mining, there are many bottlenecks including government-related procedures and getting various clearances that will take 3-4 years.

These issues need to be addressed at the earliest.?
He adds, ?In the current scenario, many mines have been closed down for small reasons and nothing is moving ahead. In the last six months, three of the mines in which we were working, were closed due to similar reasons and around 200 workers are sitting idle. However, on a positive note Kousik adds, ?One of the major trends is the new land acquisition bill. If this is done properly, it will be easier for people to acquire land and start the actual mining process, which is not happening today.?

The budget impact
The Indian mining sector has been a success story in waiting for decades. Despite enjoying an endowment of the top 5 or 6 reserves globally across commodities such as thermal coal and iron ore, the mining industry has remained relatively small and stagnant. In fact, over the last decade, the contribution of mining to India?s GDP has fallen from 1.2 per cent to 1 per cent.

On a positive note Bansal says, ?The Union Budget reiterates government?s focus on construction and mining sectors. Growth in infrastructure will further fuel the demand for stones, cement, steel and a huge demand for coal, especially from power sector. This will boost the sales of mining equipment such as dump trucks, and large capacity excavators, wheeled loaders, dozers and motor graders.? He adds, ?The country saw policy paralysis in the last few years, which hindered the growth in the infrastructure and mining sectors. Now consistent efforts are being made by the government to overcome the issues in terms of regulatory reforms and adhering to a fiscal discipline. However, it takes time for the construction and mining activity to change at the ground level. Further, the growth is expected to be incremental and therefore, Off-Highway Research projects the overall construction and mining equipment market to grow at 13-15 per cent every year until 2017, although the trends for individual equipment types may vary.?

Nath has a different take. According to him the Union Budget has two measures that could negatively impact metals and mining companies - the increase in clean energy cess on coal to Rs 200/tonne from Rs 100/tonne, and the hike in basic custom duty on metallurgical coke to 5 per cent from 2.5 per cent earlier. Nath says, ?Coal and metallurgical coke are key raw materials. The increase in clean energy cess on coal could also impact power companies which depend on coal to produce energy.? He further adds, ?However, the impact would be limited.?

Says K Ramesh Reddy, Senior General Manager - Operations, AMR India, ?There is nothing specific on mining in the Budget 2015-16 for coal and minerals mining. The government is planning to double the coal production within the five years. There are ambitious plans but don?t have specific relief for the mining companies in the Budget. For commercial trucks, excise duty has been increased due to which, imported trucks will cost more. In the current scenario, one good indication is that the government wants to move things faster and want the mineable reserves to be mined at the earliest. We sincerely appreciate this.?

On a positive note he adds, ?In the new allotted blocks, some of the bigger blocks have huge potential for coal mining. The two blocks of Machhakata and Chhendipada together has the potential to mine about 50MT of coal. Like all those big blocks, unless and until the state governments also involved with a unified intention of getting the clearances faster and create a conducive atmosphere to do the mining, the industry is not going to get the required results. Now Central government is putting its concentrated effort in fastening mining operations of fresh blocks, but state governments also should put their efforts.

Demand surge
Earthmoving equipment: The expected growth in mining is going to positively impact the demand surge for mining equipment and machinery. The increase in coal and mineral production would require a large number of equipment for opening new mines and enhancing production in existing mines along with replacement demand. Says Bansal, ?Off-Highway Research is very bullish on the prospects for all types of mining equipment such as dump trucks, dozers, excavators, mobile compressors, motor graders and wheeled loaders. However, the actual demand would be driven by the pace at which the government is able to facilitate project execution by bringing in regulatory, administrative and procedural reforms.?

According to Dimitrov Krishnan, Vice President, Sales & Marketing, Volvo CE, India, there has been a surge in demand for mining equipment since last few months. He says, ?Mining segment, particularly coal mining, is expected to drive high business activity in the coming months. We expect the blocks auctioned in the recent auctions to start activity within the next six months. The activity in iron ore is still very low and expectations are that this sector will also improve by year end. Speaking about the demand-supply Krishnan says, ?The demand for larger hydraulic excavators (> 40 T), wheel loaders, dump trucks and motor graders is expected to increase. The early indicators are already visible with contractors taking action to increase fleet size. The actual increase will be visible in the coming two quarters for sure. We estimate above 40 T hydraulic excavators and suitably sized dump trucks to be key drivers of equipment demand.? He adds, ?Outsourcing of mining work to specialist mining contractors is expected to be the dominant feature of the mining activity in 2015 and early 2016. Both PSU?s and private coal blocks are expected to follow the same route in the medium term.

The cost competitiveness of specialist mining contractors is hard to beat in the near term.?

Says Sanjay Wadnerkar, Vice President, LiuGong India, ?We are quite hopeful about the revival of mining sector which will see a great upsurge in the next ten years. There is huge gap between the demand and supply of coal. To achieve the huge demand for coal mining companies have already started enhancing production and usage of new equipment will increase, especially among Tier 1 and Tier 2 contractors. With increased focus on captive mining, demand for large excavators and higher capacity wheel loaders for coal mining is sure to go up. For bigger capacity excavators, demand will come from mining, and quarry segments. For wheel loaders, we are getting ready for a vast range from 1.5 T-5 T and upwards. Higher capacity wheel loaders will be imported from China as we see opportunities coming from rack loading in surface mining.?

DTH/TH drills
According to Ahuja, the recent and future auctioning of coal blocks is going to provide a great fillip to the demand for blast hole drills which will be needed for production when the mines start and this will also create a great pull for smaller DTH (Down The Hole) drills as well as TH (Top Hammer) drills. These will be needed for development of mines before they reach the production stage. According to him state-owned coal players like Singareni Collieries and Coal India subsidiaries like Central Coalfields have invested significantly in rotary blast hole drills (160-250 mm) in the first two months of 2015. ?These investments are predominantly to replace ageing fleet. More replacement investments are expected from Bharat Coking Coal, Eastern Coalfields, Western Coalfields, South Eastern Coalfields and Northern Coalfields.? He adds, ?Private investment is also expected but this would depend on the speed of execution post auctions. The main bottleneck is passage of right to fair compensation and transparency in land acquisition, rehabilitation and resettlement (Amendment) Bill, 2015.Environment clearances also have to be fast tracked in order to speed up the process and get the operations off the ground.?

Bulk handling systems: Speaking about the demand-supply scenario for bulk material handling equipment Y Srinivas Reddy, Managing Director, Bevcon Wayors says, ?With opening of coal mines for private operators there is huge demand going to be created for bulk material handling industry in coal sector. Huge investments going take place in coal washery projects towards mineral beneficiation and new mines are going to open up as well.?

According to him the most important development, according to Reddy, is government announcement on five ultra-mega power projects 4000 MW each which will create huge opportunity for crushing, screening and conveying equipment. Reddy also adds, ?Coal mine auctions that are just concluded will take time to generate demand for mining equipment. It?s difficult to project the growth at this moment. Having crossed the first hurdle of government allotments, the new stake holders of the projects have to tie up with finance institutions and followed by the assessment of the ground realities and other necessary approvals to kick start the mining activities.?

Underground mining
Speaking about the potential of equipment and machinery demand from underground mining S Ananthakrishnan, AVP, Mining Project Sales, Gmmco, says ?There is very good potential for underground mining, especially in coal as this minimises the environment issues. In the last five years high capacity room & pillar systems as well as long wall systems have demonstrated their capability in CIL subsidiaries, due to which CIL has earmarked several mines for design and development by UG method in the next five years. Tenders/orders for a few UG projects are underway. A few UG coal blocks will also be auctioned for bidding by private end users of cement, sponge iron etc.?

He further adds, ?The e-auctions to private and PSU?s will open up very good demand for mining equipments from Y2016. However, it depends on the participation and price level that the private sector companies are willing to pay for the auctioned blocks. Success of auctioning also depends on the commitment government is willing to give towards fast paced environment/forest clearances as well as support for land acquisition. We are already witnessing concerted efforts from PSU?s viz CIL subsidiaries, SCCL, NLC,GMDC to increase coal and lignite production and the results will be seen from 2015 onwards.?

Kousik says, ?Major coal and mineral PSUs are definitely doing some capex investments on expansions. Till date, a large amount of coal mining has been open pit. In another 10-15 years, this will cease because there won?t be enough area to do open pit mining and you will have to go deep into the underground. Now people have started or starting to go underground for mining. So, definitely there will be more underground mining in future which will require more capex with high-speed cutting systems like long wall continuous miner systems. With the coal block allocations, private players also will be active in new mining technologies.? He further adds, ?However, in metal mining, though there is lot of private players, many mining areas have stopped and things are not moving. There are lot of ambiguities among people as to how long will they be able to continue with that mine. Today, things are moving fine, but tomorrow, if some regulatory issues come up and things are held up, the whole efforts and the money invested will go in vein. Nobody will come up to invest in such a situation. We are currently facing a similar situation in chromite mining.?

Tech trends
In the case of mining equipment, the technology depends on the mining operations in the country. In India, opencast mining is more popular than underground mining. Hence, regarding the equipment required for opencast mining, like dumpers, dozers, shovels, draglines and excavators, the level of technology of the equipment manufactured is at par with international standards. As a global phenomenon, the pace of technological change had been especially rapid in the second half of the last century and the mechanization of unit operations has led to the development of long-wall technology, with the concept of mass production in the coal mining industry. This was also aimed at reducing the number of accidents, drudgery, monotony and dangers to workers engaged in underground mining operations. The development of mass production technology including long- wall equipment, continuous miners, ploughs and shearers, has been accompanied by a series of incremental and innovative developments in roof- supporting practices.

In the prevailing situation, the mining sector is facing tremendous pressure to control production costs without compromising on the essence of environment-friendly operations. This has necessitated a perceptible shift towards modern mining equipment. Technology will continue to play a vital role in maintaining desired productivity levels and in supporting the concerns of environment-friendly mining. We are already witnessing to technology changing the way the mines operate today; there are large surface coal and iron ore mines in India which use state-of-the-art equipment. The underground base metal mines have chalked-out programmes for modernization and are using high-end mining equipment and methods like drilling, rock bolting, mucking and hauling.

Golden days ahead
?It?s good to note that Indian mining sector is going to have golden days ahead,? says Reddy of Bevcon Wayors. He avers, ?With recent coal mine auctions, and recent Bills passed in parliament, (coal mines (Special Provisions) bill as well as the mines and minerals (Development and Regulation) Bill) has opened up the sector for Indian and foreign private firms for mining. This has generated positive hopes across the Indian mining industry. However, clarity need to be obtained on iron ore mining area and land acquisition bill. If these come through, I?m sure there is no looking back for at least next five years.?

Koushik sums up on a high note. ?The potential is very big and 2017-18 will be the year that will see the momentum in mining. Because everybody who is going to take these coal blocks has to go underground and they don?t have much to do in the open pit mining and we will have to go with the latest technology equipment and methodologies. ?

• India to overtake the US as the second-largest coal consumer after China
• India to more than double coal output to 1.5 billion tonne by 2020
• Coal India to double production - from 500 mt to 1,000 mt by 2019-20
• Coal Mines Special Provisions Bill and Mines and Minerals Development (MMDR) Bill to boost the mining sector.

Coal India has been directed by Government of India to double production of coal from the present level of 500 mt to 1,000 mt by 2019-20.

• Construction and mining equipment market to grow at 13-15 per cent every year until 2017
  

• Demand for hydraulic excavators (> 40T), wheel loaders, dump trucks and motor graders to increase
  

• E-auctions to provide a great fillip to the demand for DTH /TH drills
  Huge demand to be created for bulk material handling industry in coal sector.
  

OEMs need to introduce rental option
?The growth prospects for mining equipment are tremendous. There is good demand for excavators and wheel loaders from mining and quarrying; there is also very good demand for machines on rent.? Singh further adds, ?However, the market is flooded with brands and proper decision making for small mine owners like us is a challenge; also after sales service needs improvement. Manufacturers may earn more and get loyal customers if they introduce rental options too.?
Jasbir Singh, Chief Executive Officer, Associated Mining Co

• High capacity room & pillar systems as well as long wall systems to pick up
• With the development of mass production technology demand for long- wall equipment, continuous miners, ploughs and shearers to go up.
• This will be accompanied by a series of incremental and innovative developments in roof- supporting practices / technologies

The underground base metal mines are using high-end mining equipment and methods.