The document discusses opportunities in India's growing mining sector for providing services. It notes that the government aims to increase mining's share of GDP to enable growth of 10-12% annually. Recent policy changes are meant to boost transparency and investment. This will increase demand for mining equipment, technology, and the outsourcing of services like exploration, mine development, processing, and consultancy. Foreign companies have opportunities as global leaders already have manufacturing plants in India and policy allows 100% FDI in most mining sub-sectors. The mining services market remains fragmented regionally but is consolidating with some contractors taking larger roles.

1. Indian Mining Sector – growth and need for services
Dr. Nik Senapati
11 May 2017, Mackay, Qld

2. CONTENT
Features of the legislation
Mineral Mineral Asset dispensation
Challenges for stakeholders
Opportunities for stakeholders

3. • Transparency
– Removal of discretion: auction to be sole method
of allotment
• Security of Tenure
– Mining lease would be granted for a period of 50
years as against the 30 years and 20 year renewal
earlier
– There will be no renewal
– all mining leases would be put for auction at the
completion of the tenure.
– This provision applies to all minerals other than
coal, lignite and atomic minerals.
• Structured Dispensation
– the state government select, through auction by a
method of competitive bidding, including e-
auction, an applicant who satisfies the eligibility
conditions
3
Some Features of the legislation

4. • Assets are identified by state.
– The State Government or Geological survey of India or any other agency, complete
exploration up to G2 level [conforming to UNFC] and to establish indicated mineral
resources in the area to be granted under concession.
– State Govt also demarcates the area for mining including area for all the activities
related to a mine
• Assets are auctioned by states
– The State Government initiates an auction process for grant of a mining lease with
respect to an area or block within the State
– The State Government, to commence the auction process, issues a notice inviting
tender including land details and a geological report
• Permitting process still not eased
– The preferred bidders need to acquire all permissions such as surface rights,
environmental clearances, Approval of mine plan etc from relevant authority.
• Captive and non captive distinction.
– Govt. at their discretion sometime may restricts the end use of the mineral
4
Some Features of the code

5. • Coal, Minerals, Old blocks being re auctioned- Both coal and
minerals
• New blocks being re auctioned & Commodity wise dispensation
• Successful auctions & Unsuccessful auctions- 5
Mineral Asset dispensation
Source: Ministry of Mines TAMRA Portal
*Non-Coal minerals only

6. • Bidding strategy
• Data availability & Data Quality - Resource Vs Reserve in the asset.
• Permitting process management
• Size of blocks
• FDI of up to 100 per cent is permitted under the Automatic Route to explore &
exploit all non-fuel & non-atomic minerals & process all metals as well as for
metallurgy.
• FDI caps for coal & lignite has been increased to 100 per cent under the automatic
route.
• Profits of companies producing specified metals are given tax concession under
the Income Tax Act
• Low custom duty on the capital equipment used for minerals
• Companies who do mining in backward districts are eligible for complete tax
holiday for a period of 5 years from the commencement of production & 30 per
cent tax holiday for 5 years thereafter.
6
Challenges for Stakeholders

7. Growth in the Indian Mining Sector will create opportunities for
services along the entire value chain
Broad Categories of Mining Services, currently
required in India
OpportunityforMiningServices
Mine development and
operation
Procurement ,
maintenance and repair
contracts
Software
(IT solutions)
Mine site rehabilitation
expertise
• India’s mining sector is a key source of raw
material towards meeting the government’s
ambitious Make in India programme
• GOI aims to increase the share of mining and
quarrying in GDP from current 3% of GDP to
5% of GDP in the coming years.
• This would require the mining sector to grow at
10-12% per annum
• Recent policy changes and initiatives are
geared towards enabling the sector to
contribute 1% to the country’s overall GDP
growth over the next couple of years
• GOI has initiated dialogue with all stakeholders
for creating a future roadmap of growth and
development, with a view to enable resource
security while balancing interests for
environment and development
• Ongoing mining lease auctions are expected to
bring greater transparency to the sector, while
creating jobs in the sector and promoting
investment
• Provision of adequate mining equipment and
services will be needed to support these growth
aspirations

8. Landscape of the Indian mining equipment and services sector
• Mining service market is fragmented,
characterized by regional dominance with
poor economies of scale and weak
operational management
• Mining services sector is likely to witness
consolidation and get more structured in next
few years
• Mining companies have started outsourcing
part of projects to mining services
companies
Select
Outsourcing
Primary focus is
on labor supply for
a fixed term
Regional
dominance of
location specific
small contractors
Contract
Mining
Leading contract
miners are Essel,
Triveni, Rungta,
Sainink Mining
Big players such
as Coal India and
Sail are
developing in-
house capabilities
MDO
MDO bring in
capital, technology
and economies of
scale
It is in the initial
stage but is
picking up fast
Mining Service Contracts: some models
• New prospects in the mining sector will
create additional demand for advance
mining technology, cost effective and
automated technological equipment
• About 80% of demand for mining equipment
in India comes from coal & iron ore sector
• Earth moving and mining equipment sector
has a significant market size
Break up of mining equipment sector on
sub-segment basis
Source: KPMG, CII, 2010 (latest available)

9. Opportunities for foreign companies
• Some of the top mining equipment
manufactures and service provider in India,
that have significant market share are Wirtgen
India, L&T Komatsu, BEML, Liebherr,
Bucyrus-Erie
• These provide such products and services as
Dumpers & Dozers, Hydraulic Excavators,
Rope Shovels , Drag Lines & Drills, Surface
Miners, Long Wall Equipment etc.
• To maintain competitiveness, some global
giants have established manufacturing
facilities in India:
• As per some estimates, mining and construction
equipment market in India is valued at ~ USD
33.7 billion
• GOI seeks to improve mining production from
existing and new mines by adopting latest mining
technology and equipment – some of which is
missing locally
• All sub-segments of mining and earthmoving
equipment are open for 100% FDI
• Almost 2/3rd of domestic production is by foreign
players, either through wholly owned
subsidiaries or through joint ventures with Indian
companies
• High value advanced equipment is imported -
China, Germany and USA are major suppliers
Operates 6-7 manufacturing facilities
across India, not only for domestic
but also for global supply
Operates around 3 manufacturing
facilities in India, with services like
rock excavation, exploration drilling,
tunneling, underground mining etc.
Operates 3 manufacturing facilities in
India, serving domestic market as
well as exports to other Asian,
African and Middle east markets.
Source: Swedish Trade and Invest Council, 2012

10. • Database management
• Geophysics- ground and airborne
survey
• Exploration project management
services
• Advanced exploration drilling
technology
• Knowledge management for
conceptual targeting of deeps
seated resources (for NMET
projects or for GSI’s Project
Uncover)
10
Opportunities for Exploration Services

11. Exploration-
• Drilling, Mapping, geophysical
logging.
• Geochemical sampling.
• Exploration project management
services.
• Advance drilling equipment's.
• Cost-effective, rapid implementation
at all stages of the exploration.
11
Opportunities for Technology Providers

12. Mining-
• Automation, maintenance,
optimization, safety, geotechnical
and mine stability - both open pit and
underground mines.
• Mine environment, mine water
management, mine closure and
rehab.
• Underground mining technology,
mitigating spontaneous combustion,
mine control systems, drilling and
blasting, haulage, quality control.
12
Opportunities for Technology Providers

13. • Processing –
• Energy efficiency Communication
efficiency, optimization. Water
management, tailing pond design,
process control systems.
• Crushing, Grinding
• Gravity Concentration, Magnetic
Separation.
• Flotation Cells
• Electrostatic Separator.
• Classical Wet Analysis.
• Atomic Absorption Spectrophotometer
(AAS)
• X- Ray Fluroscence Spectrophotometer
(XRF)
• Inductively Coupled Plasma
Analyzer(ICPA)
• Infra Red Spectroscope(FTIA).
• Ion Chromatograph.
• Carbon Sulphur Analyzer.
• UV Visible Spectrophotometer.
• Flame Photometer.
13
Opportunities for Technology Providers

14. • Consultancy
• Exploration, mine development,
EPC, EPCM for mine and processing
plant development,
• Integration of ERP systems in a
mine
• Mine control systems management
14
Opportunities for Services

15. 15
Unearthing Sustainable Values
www.geovale.com
Solutions for the Global Mineral Exploration and Mining Industry