With the growing demand for increased output of coal and iron ore and other minerals, the demand for mining equipment and machinery is expected grow manifold.
The mining sector has gone through major challenges in the last few years. For instance, the CE industry supplies its machinery for extraction of coal and iron ore for mining activities however restriction of iron ore mining in Goa, Karnataka and Odisha has had an adverse impact in the last two quarters. Coal sector was relatively less impacted though there still a massive shortage in coal production in the country despite adequate coal deposits in the country.
According to the Annual Report FY13, Ministry of Mines, Government of India, after growing at more than 8 per cent for many years, the Indian economy registered a GDP growth of 5 per cent in FY13, the lowest in almost a decade. The ongoing slowdown has had an impact on demand for metals across all of the major consuming sectors.
Says Dimitrov Krishnan, Vice President, Sales & Marketing, Volvo CE, India, ´Demand for minerals, as well as for mining services, is strong in the country. In fact mining in India is becoming organised which is evident in the way companies have started outsourcing projects to mining service companies; contract mining could also be a solution to the current coal deficit in the country. And with the new government´s plan to open up the coal sector for commercial mining, this sector has the potential for large growth in the coming years.´
For the past few years, global economic uncertainty combined with political upheaval, has made the mining sector a volatile environment where the demand for metals, natural resources and commodities has ebbed considerably. Then again, India has an estimated $200 billion of as-of-yet untouched mineral reserves. More than 80 mineral commodities are produced here and India ranks among the world´s leaders in iron, bauxite, zinc and coal.
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 mechanisation 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. When India is geared up to open up new mines on the PPP model to adopt mass production technology, the coming years will see the adoption of some of the best technologies in the world.
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 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; 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 modernisation and are using high-end mining equipment and methods like drilling, rock bolting, mucking and hauling.
Says Samir Bansal, General Manager, India, Off-Highway Research, ´Mining sector has underperformed in the country during the past five years despite a massive growth potential on account of social, political and legal issues coupled with problems related to land acquisition and rehabilitation, and government clearances and approvals. However, some positive movement is now visible in this sector as the new government is trying to tackle the constraining issues as mining growth will also support infrastructure development.´ On a positive note he adds, ´Problems related to the coal sector are being addressed on priority by the government as it is the major source of power in the country and ´Make in India´ policy also needs stable power infrastructure. Despite huge reserves of coal, the domestic production is not able to meet the demand leading to increased imports and higher current account deficit. The coal production is likely to increase substantially in 2015.´ Bansal further adds ôThe demand for steel and cement in the country is already growing with improved business sentiment and are much needed for infrastructure development. Further, most of the legal issues related to iron ore mining have now been resolved. Therefore, increased activity levels are expected in lime stone as well as iron ore segments, which would lead to improved sales of mining equipment.´
Rajesh Nath, Managing Director, VDMA India Services, had this to say, ´The Indian market is served for many years, not only because of the need of raw materials to foster the nation economic growth but also because India is the third largest producer of coal. Difficult regulatory framework and business environment slow the development of coal production. Consequently in India German mining equipment sold less good recently. As in 2014 worldwide exports of machines from Germany decreased by 8 per cent in the first half of the year, exports of mining equipment to India decreased to touch a figure of Ç10.2 million, in the same period. This amount of decrease correlates with the shrinking imports of mining equipment to India last year.´
ôIn last quarter we did not experienced any market growth due to current mining scenario but looking forward for positive growth in Q2-15. However, we are hopeful in revival of coal and mineral segment as it is very important for India´s economic growth. India is the world´s fifth largest energy consumer, indicating a high potential for growth in this sector. Of the total electricity consumed in the country, approximately 80 per cent is produced from coal. Coal is major source of energy in steel and cement for next decade or more,´ Sanjay Wadnerkar, Vice President, LiuGong India.
Speaking about the potential
S Ananthakrishnan, AVP, Mining Project Sales, Gmmco, says ´There is a 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 proposed auction of first set of blocks in March 15 to private and PSUs 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 in Y2015.´