Boston, MA -- (SBWIRE) -- 06/13/2014 -- A greater number of state-owned miners will be keen to expand production along with India's growing economy. However , the country's poor operating environment will continue to impede growth in the mining sector. A domestic shortfall in coal production is unlikely to fade a way anytime soon, while growth in iron ore production will be restricted by the government's clampdown on illegal mining.
While growing domestic demand for commodities will encourage state-owned miners to expand production, we believe India's poor operating environment will continue to restrict growth in the mining sector. A spate of bureaucratic and regulatory hurdles will remain major challenges for miners to grapple with over the coming quarters. For instance, the difficulties in securing environmental clearances and land acquisition have led to a series of mining projects being delayed over the past year. Vedanta Resources' bauxite mining project in Odisha was forced to put on hold due to fierce protests by the local community.
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A bright spot, however, is that the new Bharatiya Janata Party (BJP)-led government will implement positive reforms to revive economic growth. The party's track record of pro-business dealings could bring about an improving operating climate in the mining sector.
In our view, India is set to face a growing shortfall in coal production over our forecast period to 2018. Although the government will be keen to expand coal output to tackle chronic power shortages, this will be a challenging process. India's coal sector is rife with theft and corruption and hampered by primitive mining techniques. Additionally, significant amounts of coal deposits are located in protected forests or conflict-laden tribal lands, making it extremely difficult to increase production. In terms of iron ore, the government's crackdown on illegal mining activities will prevent a significant recovery in output over the coming quarters. We expect more domestic firms to venture...
The India Mining Report has been researched at source and features Business Monitor International (BMI)'s mining and commodity forecasts for metals, minerals and gems, covering all major indicators including reserves, production, exports and values. The report also analyses trends and prospects, national and multinational companies and changes in the regulatory environment.
BMI's India Mining Report provides industry strategists, service companies, company analysts and consultants, government departments, trade associations and regulatory bodies with BMI's independent forecasts and competitive intelligence on the mining industry in India.
- Use BMI's independent industry forecasts on India to test other views - a key input for successful budgeting and planning in this mining market.
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