why invest in india

here is an copy from a NSL posting that applies to IRL even better since IRL is already a producer.

OVERVIEW

SIZE

* India is rich in mineral resources with large reserves of several primary metal ores like iron ore, bauxite, chromium, manganese and titanium
* India has
o 24 billion tonnes of iron ore reserves - the fifth largest reserve base in the world
o 2.4 billion tonnes of bauxite reserves - the fourth largest reserve base in the world
o 240 million tonnes of manganese reserves - the second largest reserve base in the world
o 57 million tonnes of chromium reserves - the third largest reserve base in the world
* Indian deposits of bauxite and iron ore are among the best in the world in terms of quality and mineability



STRUCTURE

* Mining has a large presence of public sector companies which account for over 80% of the total value of minerals produced
* Large integrated players with interests from mining to metallurgy and processing like SAIL and Tata Steel in steel and Hindalco and Nalco in aluminium, dominate the metal and mining industry
* Sesa Goa (a subsidiary of Vedanta Resources) is one of the largest companies in mining and export of iron ore
* Orissa, Jharkhand and Chhattisgarh are the key mineral-rich states of India
* Orissa has over 50% of India’s bauxite reserves and over 20% of India’s reserves of iron ore



POLICY

* 100% FDI is allowed under the automatic route for mining of metal ores
* Government keen to encourage investments for value added metal manufacturing
* 100% FDI is allowed in Titanium bearing minerals and ores and its value addition
* The 2008 National Mining Policy has made it attractive for prospectors and mining companies to invest in mineral exploration and development in India


OUTLOOK

* Indian mineral production is expected to grow rapidly in the coming years – driven by growth in metal manufacturing
o Iron ore production is expected to grow at a CAGR of 10-12% over the next 5 years, in step with rapid growth in the steel industry
o Bauxite production is expected to double to over 23 million tonnes by 2010
* High growth expected in the consumption of manganese and chromium



POTENTIAL

* India has several advantages, making it an attractive destination for mining and value addition
o India is relatively under-explored in terms of mineral prospecting
o Large quantity of high-quality reserves
o Low labour and conversion costs
+ India is among the lowest cost producers of steel and alumina
o Large and growing domestic demand
o Strategic location: proximity to the developed European market and the fast-developing Asian markets for export of steel, aluminium
* India presents substantial mining opportunities across all metal ores
o Estimated 82 billion tonnes of reserves of various metals yet to be tapped
* Large scope for investments in mining of iron ore and bauxite
* While India has 7.5% of the world’s total bauxite deposits, aluminium production capacity is only 3% of world capacity, indicating the scope and need for new capacities
o Recent acquisitions by Indian companies (Tata Steel and Hindalco) in the metals space auger well for increased mining activity in India
o National Mineral Policy will encourage mineral prospecting and mining investments in India



Burgeoning demand

Expectations are that India’s minerals consumption will continue to increase signifi cantly into the future, on account of India’s development path coupled with strong ongoing growth expectations. Its growing middle class is earning higher incomes and fuelling stronger domestic demand. Institutional reform is on the political agenda with governments looking to promote improved competitiveness, greater investment, and greater output from better productivity.
Exports of copper ore rose four-fold in the five years to 2007 while the value of lead exports rose ten-fold. Coal sales have doubled and gold sales tripled. Iron ore is increasingly in the mix, with Indian companies looking to invest in one of the building blocks of a modern economy.
Australia is well placed to respond to this burgeoning demand. Economically demonstrated resources remain very high for those commodities of interest to India, and multi-billion-dollar capital expenditure is proposed to expand brown and greenfield minesites, as well as the supporting infrastructure.
The scope of the opportunity lies in the mutual interests of both nations. India remains rich in mineral endowment and its proximity to burgeoning Asian commodity markets offers opportunities for companies to continue to diversify and expand operations. Companies such as Rio Tinto and BHP Billiton are increasingly active investors in India, with substantial interests in iron ore, diamond, coking coal and steel production. A number of other Australian resource companies are also actively assessing opportunities for expansion into India.