每日吃瓜

Mining is considered as one of the most challenging and risky operations among various industries. Most mines are remotely located as they are very difficult to access due to poor transportation infrastructure and extreme conditions. In spite of all these challenges, mining is the backbone of all industries and contributes significantly to the industrial growth of a nation. Various technologies and equipment being developed over the years have played an inevitable role in scaling down the challenges at mining sites and improve mining efficiency, productivity and safety. 每日吃瓜 explores the mining scenario in India and the factors that can drive the growth of mining equipment sector.

The Covid-19 pandemic was an unprecedented impact on the global industry and economy. Indian market also suffered from the pandemic attack with most industry segments and the whole economy plunging into recession. While many segments hit hard, the impact was not as severe on mining industry. As MV Rajasekhar, Director (Mining & Construction), BEML observes, 鈥淭he impact of the pandemic was minimal on mining equipment and spares business as the mining industry especially coal mining continued its production, which is classified as an essential commodity.鈥�

In mining, government investments play a major role currently in the mining demand.

Arvind Patil, General Manager, Epiroc Product Company Nashik, says, 鈥淲ith the present initiatives of the government鈥檚 鈥楳ake in India鈥� plans, we are getting the result with increase in demand from the government sector in specific for the mining segments. We are experiencing good increase in demand in all sectors like coal, iron ore, limestone, dimension stone granite mines and in exploration activities.鈥�

The recent commercial coal mining auctions are considered to have a positive impact on mining equipment market. As Dheeraj Panda, Director, Sales, Marketing and Customer Support, Sany Heavy Industry India, 鈥淥verall performance of mining sector seems to be on track, after the government has put 41 coal blocks on auction for commercial mining for private players, and unlocked 500 non-coal mineral blocks to boost the economy ravaged by Covid-19. The move certainly has worked as a catalyst of growth for mining equipment manufacturers and other vital industries.鈥�

As per the recent CARE Ratings report, India鈥檚 coal production continued to increase year-on-year (y-o-y) for the third straight month ended October 2020. Coal production grew by 13.7 per cent y-o-y to 50.7 million tonne in October 2020. During April-October 2020, coal production stood at 304.9 million tonne (mn t) compared to 316 mn t in the corresponding period of FY20, down by 3.5 per cent. Coal production was impacted during April-July 2020 due to the Covid-19 induced lockdown which hampered demand from the user industries. During this period coal production fell by 13.6 per cent as compared to the corresponding period in 2019. However, with easing of lockdown restrictions, industrial activity picked up and coal production also saw substantial growth from August 2020 onwards. Coal production registered 13.5 per cent growth during August-October 2020 compared to the corresponding year-ago period.

Hemant Mathur, Assistant Vice President, Sales and Marketing, Tata Hitachi Construction Machinery Company says, 鈥淐oal production in the country contributes to over 50 per cent of mineral production. We have been experiencing the growth of this sector during the pandemic too. Government has taken a lot of initiatives to revive the economy. Coal India has been keeping production in line with the vision of one billion tonne by 2023-24, which gives confidence that the growth trend is expected to continue in the same pace.鈥�

鈥淥ne of the top-five global miners in the world and one of the largest producers of coal, steel, aluminium and zinc, India鈥檚 mining sector continues to strive in its long journey to attain development,鈥� adds Sharad Thussu, Vice President, Mining & Construction Equipment Division, Voltas

Mining opportunities|

Anil Kumar Jain, Secretary, Ministry of Coal, Government of India, speaking at a FICCI conference last month said that the new mining reforms will get adopted in the statute book in next 6-8 weeks. The government is laying down a robust framework to enhance productivity and reduce environmental impact with a specific focus on sustainability to be embedded at the core of the mining operations.

Currently, India imports coal from countries including Australia, Indonesia and South Africa. With the commercialisation of coal blocks announced as a part of the Atmanirbhar Bharat scheme, India is set to keep the coal imports at a minimum level. As Rajasekhar points out, 鈥淐ommercial coal mining auctions are meant to reduce imports of coal by increasing the domestic coal production. This will open new opportunities that will boost the mining equipment market in India.鈥�

Patil of Epiroc Mining is also optimistic on this and feels that this development would yield fruits in terms of increased sales to private mining companies in the coming years. 鈥淗ealthy competition will demand for higher efficiencies and productivity, which can be achieved using advance technology equipment from Epiroc, backed by deep routed service support in India. Focus would shift from cost competitive equipment to safety, environment-friendly and competitive total cost of ownership,鈥� he adds.

According to Mathur, commercial coal mining is a great initiative and a great move for policy revival. He adds, 鈥淲e believe that this will motivate more private players and investors to get into the mining sector. We expect that this will lead to the improvement in the efficiency of mining operations, for which the mining equipment manufacturers will increase the demand for technically and technologically advanced mining equipment coming into India.鈥�

Thussu is of the view that while the hope remains to bring in private investment into the sector and overall more employment opportunities, concerns still loom in terms of sustainability and displacement of tribes.

鈥淲e are currently witnessing a surge in demand for crushers in the iron ore segment. This is primarily due to the increased local steel demand and the auctions of iron ore in 2020. The biggest challenge for new equipment sale is the over leveraged balance sheet of many infrastructure companies, reluctance of NBFCs to fund due to poor CIBIL score of contractors and RBI鈥檚 tight guidelines for banking and finance sector.鈥�

According to Panda, the demand trends for mining equipment have also been surged after the Centre has decided to unveil the non-coal mineral blocks. 鈥淎s India is looking for new-age technologies and equipment, to increase productivity with less environmental impact, SANY India has the comprehensive solutions for these challenges with the latest technologies and equipment to minimise environmental impact and reduce operational expenses.鈥�

Meeting challenges

Mining industry has always been confronted with challenges from various issues. Now it is time to mitigate those challenges and create more opportunities. According to Rajasekhar, with the revival of mining policy and commencement of commercial mining, the number of operative mines will increase, leading to rise in domestic coal production and emergence of new opportunities. 鈥淏EML with its capacity and capability is fully prepared to meet the demands from the upcoming new projects. Further, supported by its infrastructure, R&D and resources, BEML is fully geared up to meet the present and future challenges of the mining industry,鈥� he adds.

Patil says, 鈥淲e are seeing revival coming in and feel optimistic to have revival in the mining equipment market during the rest of the year. There are few challenges in supply chain and vendor capacity constraints. Imports lead times increased, due to vessel availability and customs clearing.鈥�

While highlighting the upcoming opportunities in mining, Mathur cautions the need for adequate financing for the mining equipment business growth as he says, 鈥淎lthough we are seeing an improvement in mining activities, the mining equipment sales has been facing challenges in terms of liquidity. The miners involved in the mining activities have limited liquidity for purchasing the equipment. The credit has become tough and there are not many funding agencies and banks who are coming forward to finance the mining equipment. While government buying is parallelly going on, this buying is limited and hence will not help the growth of the mining equipment market. We see a strong demand of mining equipment, but this needs to be supported by banks to lend money to boost the sales.鈥�

Outlook
Looking at the future of mining in India, things are taking shape and the government鈥檚 determination towards bringing in efficiency and sustainability in mining is going to play a major role in the demand growth of mining equipment and technologies in future. According to Rajasekhar, subsequent to the initial disruption related to supply chain, during the pandemic, the situation has improved and supply has gradually picked up.

Also, the requirement for power is ever-increasing with thermal power is still a major source of energy; hence demand for coal will remain. Further, Coal India plans to achieve 1 billion tonne of coal target by 2023-24. 鈥淲ith Government of India鈥檚 plans to increase production of coal and steel, and infrastructure development in the country, we expect that there will be continuous demand and growth in mining equipment business in the coming years,鈥� he adds.

According to Panda, the auctions of coal block may generate revenue of around Rs 200 billion per year, which will bring the economy on an even keel. 鈥淭he move will surely unlock the doors of opportunities for more business and we have already started experiencing the surge in demand and expect it to rise in the next six months,鈥� he observes.

Mathur says, 鈥淲e have not seen much of an impact of Covid on mining except in April. Subsequently, May onwards the activities were started, and we are seeing the revival in mining activities falling in line with that of last year.鈥�

The future of mining in India will depend on how soon the industry is adopting the sustainable mining practices utilising the new technologies and digital solutions in the mining projects. With public sector mining companies changing their strategy from conventional ways to modern methods with digital technologies playing a major role, the Indian mining sector is here for a turnaround soon!