Date: 13 September 2011
Intierra Resource Intelligence notes that by mine output, India is the fourth largest producer of zinc, and the sixth largest producer of lead. However, the actual impact of Indian commerce on global mining is felt far more widely.
Recent Indian mining investment has been broad-based, sizeable and reflects a willingness to invest in early stage and pre-feasibility projects. Intierra’s CEO Peter Rossdeutscher, notes this trend and provides a typical example: “Tata Steel has been very active building a mining company to help feed its steel business. In the last four years it has bought into projects in Canada (Taconite Magnetite Project) and Mozambique (Benga Colliery), where it now partners with Rio Tinto. Tata is also looking for more projects in Australia and North America.”
Other notable Indian companies targeting investment are Adani Enterprises and Jindal Power and Steel. Adani has invested over US$2 billion purchasing Linc Energy’s Bowen Basin tenements and also buying the Abbott Point Coal Terminal. Jindal operates the El Mutun iron ore mine in Bolivia and is also active in Madagascar.
ArcelorMittal, listed in New York and 40% owned by the Mittal Family in India is one of the largest steel producers in the world. It has operating iron ore and coal mines in Canada, Brazil, Kazakhstan, Russia, the United States, Mexico, Liberia, Algeria and Bosnia Herzegovina. Last year ArcelorMittal successfully acquired Baffin Iron Ore Mines and recently made a joint bid with Peabody to acquire Macarthur Coal in Australia’s Bowen Basin.
Bombay-listed Sterlite Industries recently bought Anglo American’s zinc interests in South Africa, Namibia and Ireland for US$1.338 billion, increasing the groups immediate zinc/lead annual profits by 20%. The Black Mountain mine in South Africa was also acquired for US$346M and has 4 years of reserves, contributing roughly US$73M a year to profit before tax.
Elsewhere, government-owned NMDC has been active in Australia where it bought into the Wonarah Phosphate Project and bid for Legacy Iron Ore. Hindalco Industries is exploring bauxite deposits in Cameroon with a view to increasing supply to its alumina refineries.
Rossdeutscher summarises the situation: “There is a lot more to come from India. The money is available, the understanding of where to look for resources is improving and the intent is clear and strong.”
Intierra Resource Intelligence provides business intelligence for the international mineral resources sector by delivering context-rich information to mineral resource industry professionals. Our solutions offer unique insights into company evaluations, M&A, risk management, due diligence, competitor intelligence and project pipeline evaluation.