Terms of Reference for Sub-Group II 1. To review the present status of Indian mining industry (excluding fuel minerals) and principal mineral based industries in the country and to assess its international context. 2. To assess demand for minerals/ ores/ metals and its likely growth during 12 th Plan period and in perspective of 15 years at 8%, 9% and 10% per annum GDP growth rate (including demand for minerals for production of high purity material for use in electronics and other emergency technologies. 3. To suggest priority for development of principal minerals in terms of import substitution, value addition and export , in that order, keeping in view the scope for generating employment in the sector. 4. To suggest strategies for acquisition of raw material and technology assets abroad to improve competitiveness, ensure raw material security and help the growth of the Indian mineral based industry. 1
Core groups on Mineral Exploration and Development (other than coal and lignite) for the XIIth Five Year Plan 1.Aluminium 2.Copper 3.Lead and Zinc 4.Diamond and Precious Stones 5.Cement and Limestone 6.Industrial/ Non-metallic Minerals 7.Beach Sand Minerals 8.Strategic Minerals 9.Dimensional and Decorative Stones 10.Gold and Precious Metals 2
Improvements from XIth Five Year Plan Report: •A new chapter on Strategic Minerals •A new chapter on Ferrous Minerals •Addition of Rare Earth Elements in Beach Sand Minerals • Enriched the contents on Platinum Group of Elements • Added a section on Precious Stones with diamonds • Focus on recycling particularly in metals and cement 3
ALUMINIUM (All figures in million tonnes) GLOBAL SCENARIO 2006 2010 2015(p) World Production 33.9 42.3 57.4 Consumption 34.2 41.5 58.2 China Production 9.3 16.92 23.7 Consumption 8.79 16.6 28.0 p – projected China ‐ Imported about 50% of its Aluminium requirement as scrap, bauxite and alumina ‐ Exported about 15% of its production as primary Aluminium and semis will become a large importer of primary Aluminium by 2015 ‐ Significant increase in production from 9 million tonnes to 17 million tonnes 4
By 2030, Aluminium consumption growth will be By 2030, Aluminium consumption growth will be driven by China & India. driven by China & India. 2005 2030 World demand-31.9 Mn tonnes World demand-73.7 Mn tonnes 6% 14% 5% China 23% 22% China 13% 35% India 3% 4% 5% 22% 8% 5% 4% India 5% 8% 10% 8% North America EU/EEA Japan CIS & Other Europe Latin America SE Asia India China Others Source: CRU June’ 07 Aluminium demand in India to grow more than 5 fold by 2030 27 5
Per Capita Consumption of Aluminium in the World 6
Change in consumption pattern to accelerate Change in consumption pattern to accelerate growth growth India Picture World India Picture World (%) 16 17 18 18 19 21 28 4 8 6 6 8 6 9 6 10 11 6 8 6 18 15 8 7 10 8 2 11 8 18 21 17 21 22 52 48 29 39 37 35 34 9 1970-71 1980-81 1991-92 1995-96 1999-00 Current* Wo rld E lectr ica l T r a nspor t Building Pa cka g ing Ma chiner y & E quipm ent Other s _______________________ Sourc e: Wo r ld - B arc lays & Alc o a I ndia – Co mpany Data 7 25 Electrical sector still the major aluminium consumer in India
INDIAN SCENARIO (in million tonnes) Aluminium 2006 2010-11 2016-17 1.63 (CAGR – 7.1%) 4.3 Production 0.94 1.53 2.8 (CAGR- 9.5%) Consumption 0.93 (in million tonnes) Projected capacity 2010-11 2016-17 Smelting 1.71 4.675 Refining 4.6 13.375 Bauxite mining 12.5 28.0 Deficit of bauxite mining capacity: 2 MT in 2010 ‐ 11 12 MT in 2016 ‐ 17 No new Greenfield mines Pending big projects – Vedanta 3mtpa (Orissa), Anrak 4.5mtpa (A.P), Aditya 8 Aluminium 4.5mtpa (Orissa) 4.5mtpa
Bauxite Reserves and Resources of India (Figs in Million Tonnes) 9
INDIAN SCENARIO Recycled Aluminium ‐ estimated at about 20% of consumption ‐ global consumption 32% (expected to be 40% by 2025) Currently India exports as well as imports alumina and aluminium The semis and downstream, value ‐ added, alloy production sector is not well ‐ developed in India, resulting in significant imports in these applications The priority for India should be imports substitution followed by value addition before exports • Technology for alloys and other value added products 10
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REVIEW OF XI PLAN 1. Grant of ML, EC, FC are main constraints - Delays exist 2. Recycling to be promoted - No significant progress 3. Green field smelters to be planned for - New smelter came up at future Jharsuguda 4. Import of scrap to be increased with low - Duty structure altered duty 5. Utilisation of red mud disposal - No technical break through 12
RECOMMENDATIONS • Faster clearance of big mining projects • Bauxite/ alumina imports to be facilitated through appropriate duty structure • Value addition in Al alloys and semis to be encouraged through removing inverted duty structures and induction and promotion of appropriate technologies indigenously or through JVs • Domestic recycling to be promoted by a mix of regulation and fiscal measures to ensure more organised segregation/collection of scrap and more scientific melting/recycling to provide proper quality • Aluminium smelting being energy ‐ intensive, allocation of captive coal blocks or linkages at par with IPPs for primary smelters • Development of appropriate technology through R & D for utilisation of Red Mud • Smelter can be established abroad to produce metal at low energy cost • Efforts should be made to acquire mining assets abroad 13
COPPER Global Scenario • Strategic metal for economic development; Consumption growth strongly linked to economic growth • Global consumption projected to rise from 19.4 mt in 2010 to 31.6 mt by 2025 (CAGR of 3.3%) 14
Emerging markets with low per capita usage currently to drive future growth 15 15
Distribution of Global demand for Refined Copper ‐ Page 6 16
COPPER Global Scenario • Asia’s share: 53% in consumption, 43% in refined production – but < one- fifth in mine production Region % Asia 43 America 32 • 49% of global refined copper Europe 19 production through custom smelting Africa 4 route (vs. 33% in 1995) Source: WBMS www.world-bureau.com Oceania 2 - Japan, Korea, China, India, Germany Total 100 completely dependent on custom smelters • Mine supply will continue to remain tight due to falling grades and depths, keeping prices firm; more pressure on recycling and substitutes
COPPER Indian Scenario • Hindustan Copper Limited (HCL) is the only company in mining, producing <5% of India’s requirement of concentrates; by the end of 12 th Plan, will cater to ~8-9% based on mine expansion plans • Two Custom Smelters in private sector account for ~95% of production • One secondary smelter depending on imported scrap ~ Not in producction • Refined copper production is ~6.6 lakh tonnes against production capacity of 1 million tonnes(2010-11) • largely static during XI Plan • At present only ~65% capacity utilisation 18
Indian Scenario ( contd.) (tonnes of Copper) 2006-07 2010-11 2016-17 (P) Consumption 4,14,887 5,66,261 9,50,000 Production 9,99,500 9,99,500 14,99,500 Capacity Production Actual 6,57,232 6,63,753 13,67,500 Concentrate 6,81,000 6,88,000 14,20,000 Requirement Concentrates 30,231 31,683 1,18,000 Production (HCL) • Consumption grew in XI Plan by 8.5-9% CAGR, projected to grow at the same rate in XII Plan • Custom smelters expected to add capacities in line with the growth in demand, leaving sufficient surplus for continuing exports 19
Sector wise copper consumption ESTIMATED SECTORWISE COPPER CONSUMPTION IN INDIA 11% 7% 7% 6% 56% 5% 8% Elec & Tel Transport Process Ind General Engg. Cons. Durable Bldg & Constn Others Source : ICDC 20
Indian Scenario (Contd.) • Ore resources : 1394.4 MT (11.4 MT contained Cu) • HCL holds 503.39 MT ( 6.09 MT of contained Cu) • Present mining capacity 3.21 MT, to be expanded to 12.71 MT by 2016-17 (1,18,000 tonnes of Cu) • Sterlite applied for RP/ PLs during 2007, 2008; • KCC smelter/ refinery shut down since Dec. 2008; selling/ tolling surplus concentrate; precious metals plant at ICC closed – anode slimes being exported • In view of large dependence on imported concentrates, the key focus for XII Plan should be raw material security. 21
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COPPER Copper Recycling in India • Copper content of imported copper & copper alloy scrap 2006-07 – 78,484 tonnes 2008-09 – 70,335 tonnes *2010-11 – 75,356 tonnes *(prorata on 9 months’ basis) • No precise data available or indigenous scrap. Industry estimate – about 30- 35% on average of total copper consumption • Only one 50,000 tpa secondary refined copper manufacturing facility; currently non-operational • Thus, all scrap is processed through direct melt route 23
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