Scenarios and Trends in Global Mining Industry

Introduction
Mining gives the building blocks to human advancement. The supply of metal and mineral items has
supported human attempt through centuries and will keep on assuming its part in addressing society's
necessities.
The need will stay solid, so fulfilling interest obliges discovering and growing new mines, even as
asset utilization turns out to be more proficient and reusing frameworks slope up. Luckily the land
supply of metals inside of the Earth stays powerful and new advancements will help bring new stores
on stream. In any case, these will progressively be situated in more remote locales, raising generation
and venture costs.

Urbanisation and population growth

The absolute size of population increase and the pace of urbanization in China along with other
Asian countries, including ongoing needs in the developed world has caused astonishing demand for
minerals and metals. Sturdy demand rise comes primarily from millions of aspiring individuals in
emerging economies making an attempt for an improved material standard of living. In spite of
dramatic increases in recycling, an all-round rise in newly mined materials is required to aid the
emergence of individuals, communities and countries from stagnation as well as poverty.
Minerals and metals are vital to all administrations and base that are utilized by contemporary
society: including home, bread and water supply, sewage treatment, energy supply for a vast range of
needs including heat and light, transportation, construction, production, education, health,
communication, entertainment, the arts, tourism, and the vast range of associated consumer goods
and services.
As the material way of life develops, mineral and metal request additionally grows. This example has
been trailed by every developing country. Studies have now reliably exhibited that when per capita
pay in a nation comes to US$5,00010,000 every year, metal interest increments especially rapidly.
At the point when crowded nations, for example, China and India experience this improvement
stage, the consequences for metal interest are sensational, as shown in the figures below.
The ascent of the Chinese economy since the late twentieth century has been wonderful. This
development is much more exceptional thinking of it as it began at near zero just a large portion of a
century prior. Unmistakably an overwhelming driver is urban and related administration foundation
improvement as modernization happens. This same example is starting to happen in other rising
countries also.
Nonetheless, from a point of view that considers the previous thousand years, China is just
recapturing the solid position it once held. Thus, monetary development in other recently
industrializing nations may not, for different social, financial and political reasons, coordinate that of
China.
Because of changing worldwide monetary conditions, development in China and other rising
countries will unavoidably vacillate going ahead, and the rate will probably ease off. A decrease from

a 9% for every year financial development rate to the 7.5% objective set by the Chinese powers for
2012 is demonstrative of a delicate arriving in the fleeting and a proceeded with accentuation on
household utilization in the long haul, all of which will join to see proceeding with development
sought after for minerals and metals in the economies of China and other rising countries.
Because of its requirement for minerals and metals, China has put security of supply high on its
political plan. It is spending substantial and expanding sums on investigating for minerals inside
China and is additionally connecting with take part on the planet's mining and metals industry.

(Fig. 1: Income trend growth thresholds)

(Fig. 2: Commodity demand intensity

correlates with growth threshold)

Special Characteristics of Metals

Minerals generally and metals particularly have specific properties which give to them a critical role
in everyday life and economic growth. These include their high strength, durability, ability to
conduct heat and electricity, artistic appeal, and to date, reasonable cost with all aspects taken into
account.
Metals are elements and therefore come with the potential to be indefinitely recyclable. Though other
materials could replace and substitute for metals, the range and cost usually give metals a significant
edge.

The Changing Centres of Mining

The hunt for metals has been international since antiquity. Mining transformed truly global before
other divisions of industry. Tracking the centre of gravity of global mining during the last two
centuries exhibits its role as a foundation of society through-out history. Figure 3 tells us the
percentage of world mining by region from 1850 to the present day and Figure 4 gives you an
overview of mining activities around the world.

(Fig. 3: Location of world mining by region)

Figure 3 shows that:

By the late 19th century, the part of mining in Europe weakened because the economic and political
power transferred to North America. The US in the later part of 19th and early 20th centuries then
observed a stirring increment to be followed after World War 2 by the similar dramatic decrease
experienced prior to this in Europe
The transformation of mining locations from developed to developing countries continues to be a
trend from the mid-20th century

(Fig. 4: Global mining activities in 2014)

The primary mining nations with regards to mineral production today are shown in Figure 4. Most of
them are now emerging economies, usually found south of the equator. Likewise the largest mines at
the moment are to be found in developing countries.
Recently massive investments have taken place in Latin America, Africa and parts of Asia and they
are anticipated to increase in the next ten years. Rate of growth in exploration and mining interest in
Africa, Latin America, and parts of Asia is spurred by:

The exhaustion of easily accessible mineral deposits in Europe and the US

Technological breakthroughs that resulted in the improved feasibility of mining earlier
inaccessible deposits in remote less developed areas
The growth and development of large ocean going vessels in the late 20th century, initially
for oil transport, which assisted trade of bulk mineral commodities like iron ore, coal and
bauxite.

Metals and Minerals produced

Figure 6 exhibits the value of global production. With this standpoint, metal mining is dominated by
iron ore, copper and gold which collectively account for 68% of the total value (US$854 billion) at
the mine stage of all metals produced worldwide in 2014.

(Fig. 6: Value of global production by metal in 2014)

Though the remaining 32% of the value of mine production might not be so economically crucial
from a global perspective, the other minerals and metals have an important strategic function.
For instance, nickel is central to stainless steel production; manganese, chromite and other alloying
elements award steel a variety of enhanced properties (strength, hardness); and PGMs are utilized in
catalytic converters that decrease emissions from cars.
The greater output of metals as well as the increased value of the majority of metals have led to a
surge in value of the global metal and industrial minerals mining industry from US$214 billion in
2000 to US$644 billion by 2013.

Changing extraction technologies

Mine production seems to have underwent significant changes during the 20th century with a
transition from underground to open pit mining techniques. Early in the century, underground mining
dominated in developed countries, and as mining developed in growing economies, open-pit mining
got more common. By 2016 the most of the industrial mine operations in the world were open pit
(Figure 7).

(Fig. 7: Production by mining method 2014)

The majority of productivity updates in the past century are attained because of the ability to process
lower grade ores through more effective mineral processing along with the use of ever larger scale
equipment. Hence technological enhancements have made it easy to mine ores of decreasing grades
and more complex mineralogy without increasing costs. In many instances however, the
technological development is actually made by small incremental developments instead of
innovations into entirely new processes.

The Trend to new frontiers

The trend of mine production shifting to the emerging economies may well continue. There are a
couple of major land areas on earth which have been significantly less explored as compared to other

areas: Africa and the Arctic including Siberia, Alaska, northern Canada, Greenland and the Nordic
countries.
Furthermore, you can also find opportunities for mineral extraction at the bottom of the deep seas.
The first mining permits have recently been assigned in Papua New Guinea for mining at a water
depth of 1,500 metres.

Looking forward, you possibly can get a proper picture of where mine production in the next decade
is going to be located by analysing investment flows. Current exploration projects also give clues to
exactly where mining is going. During 2014 nearly 136 new mining investment projects with an
overall estimated cost of US$74 billion were noted in company annual reports. The whole project
investment pipeline was significant amounting to US$676 billion altogether towards the end of
2014. Some 73% of this is accounted for by the three most effectively important metals: iron ore,
copper and gold. Declining global economic conditions have since stimulated companies to evaluate
investment plans as well as delay or reduce project developments.

(Table 1: Project pipeline mine investments by region 2014)

Table 1 shows a breakdown of mine investment by region in 2014. If such investment figures are
compared to the present share of mine production in each region, the following applies:

It may turn out that production in North America will increase as a share of total world
production, 8% of total production today compared to 17% of the investment pipeline.
Production in Latin America, Oceania (mainly Australia and PNG) and Europe (including all
of Russia) will continue on pretty much the same level (for Latin America, 25% of total
production today compared to 28% in the investment pipeline, for Oceania 16% and 17% and
for Europe 12% and 11% respectively).
African production will increase. The area represents 10% of todays production and 15% of
investments signalled by the project pipeline.
Chinese production is less likely to grow as fast as it did in the past ten years, because raising
total production costs accentuate the appeal of imports.

In 2014, the investment share of the top ten mining countries with regard to value of production
achieved 71%. This trend of more investments to a restricted number of countries probably will

continue, and though capital expenditures have been restricted in 2015, the growth inferred by these
kinds of figures is likely to resume in due time.

Performance of Indian Mining Industry

With 630.25 million tonnes of projected production in FY15, India is the 3rd largest producer
of coal.
Globally, India ranks 4th in terms of iron ore production. In FY14, India produced 136.5
million tonnes of iron ore and has around 8% of worlds deposit of iron ore.
India has become the Third-largest steel producer in 2015 with the production of total
finished steel at 91.46 million tonnes. India stood as the Fourth-largest Crude steel producer
in 2014, while its production increased to 86.5 million tonnes as compared to 81.2 million
tonnes in 2013.
In 2014, India has the sixth-largest bauxite reserves of about 3,290 million tonnes or 3.19
percent of world deposits. Aluminium production is estimated to be 4.7 million tonnes per
annum during 201217 while the estimated aluminium production by 6% in FY16 from
FY15.
India has vast minerals potential with mining leases granted for longer durations of 20 to 30
years.

Segments of Metal and Mining Industry

Iron and Steel

Coal

Metals and
Mining

Precious Metals
and Minerals
Base Metals

Bauxite

Aluminium

(Fig. 8)

Strong Growth in Indias Metal and Mining Sector

Currently, India has 3,108 operative mines excluding areas for minor minerals, crude petroleum,
natural gas and atomic minerals. Most of the above mentioned growth in the industrys value can be
attributed to higher prices given that production volume growth was relatively lower at 3.2%. With a
CAGR of 15.07% the value of imports have grown from 2010 to 2014 as shown in the fig.

Value of Imports of Ore and Mineral in India

250
200
150

USD BILLION

100
50
0

2010

2011

2012

YEAR

(Fig. 9)

Major Metal and Mining Players in the Country

2013

2014

(Fig. 10)
Iron & Steel Accounts for a Major Share in Indias Metals & Mining Sector

In 2014, India stood as the fourth largest crude steel producer in the world, while the
total crude steel production was 86.5 MT
India accounted for 5.19 percent of the total steel production in the world in the year
2014
India is third largest producer of crude steel in the Asia-Pacific region in 2014
Total Finished steel production (alloy + non-alloy) in India reached 91.46 million
tonnes in 2015

Shares in India's Mining Sector

Coal; 575

Metallic Minerals; 595

Non-Metallic Minerals; 2148

(Fig. 11)
Iron Ore Production

In the year 2015, India stood as the largest producer of direct reduced iron ore and worlds
fourth largest iron ore producer (global share of 8 %)
Iron ore production is estimated to have decline data CAGR of 2.72 percent during FY07
15E. Total production in FY14 stood at 136 million tonnes. Private sector accounted for 67
percent of Indias total iron ore production in FY14
Iron ore production was expected to cross 155 million tonnes in FY15. In FY14, Odisha and
Karnataka accounted for 57.9 % of Indias total iron ore production, however in 2015
Karnataka and Goa is expected to contribute to the increase in iron ore production while
Odisha would limit the growth of iron ore production on account of production cap

Majority (over 85 %) of iron ore reserves are of medium to high-grade and are directly used
in blast furnace and Direct Reduced Iron (DRI) plants in the form of sized lumps or sinters or
pellets

Iron Ore Production

250
200
150

Million Tonnes
100
50
0

FY 07 - 15

(Fig. 12)

Potential from Unlocking Indian Mining Industry

The Indian mining sector has always been a success story in waiting for years. Regardless of
savouring an endowment of the top 5 or 6 reserves globally across commodities like thermal coal and
iron ore, the mining industry has continued to be comparatively small and dormant. In reality
throughout the last decade, the contribution of mining to Indias GDP has dropped from 1 .2 % to 1
%.
If effectively tapped, the mining industry could very well help propel growth for the country over the
subsequent decade. In fact, the performance of mining sector is going to be an important factor for
India to achieve 7 % plus GDP growth. The mining industry can potentially create 6 million
additional total jobs by 2025, accounting for 12 % of the new non-farm job space. Simultaneously,
the mining industry could contribute further an additional USD 125 billion to Indias output and
USD 47 billion to Indias GDP by 2025.
For this to materialize, overall ecosystemcentre, state and mining industry ought to function as a
whole to unlock Indias potential in mining.
Mining delivers the raw material for numerous vital sectors like steel and power, and is consequently
the backbone for the manufacturing and infrastructure industries.
In 2012, the mining industry accounted for 3 million jobs straightaway, as well as created an
additional 8 million opportunities. In the business-as-usual environment ( GDP rise of 5 .5 % ) ,
simply no further jobs will probably be created by the mining industry , with mainly overall
performance boost likely to account for the over-all performance growth . Nevertheless, a reform
situation resulting in enhanced growth (GDP growth rate of 7 .8 %) can certainly generate another 6
million jobs (immediate as well as induced) over the business-as-usual scenario by 2025. That would
certainly be 4 to 5 % of the overall non-farm opportunities necessary to assimilate Indias
demographic needs, and 12 % of the gap which is sure to stay after jobs going to be generated in the
business-as-usual scenario.

(Fig. 13)
By 2025, the output from the mining sector could be 1.5 to 2.5 times of the current levels. In the
accelerated growth scenario, an additional USD 47 billion could be generated annually compared to
the business as-usual scenario. The mining sector could contribute USD 50 to
80 billion by 2025 to Indias GDP. In an accelerated growth scenario, it could generate an additional
USD 31 billion over the business-as usual scenario.

(Fig. 14)
In 2012, the mining and downstream industry generated about USD 18 billion in taxes. It could
contribute approximately USD 40 to 50 billion as royalties, taxes and duty by 2025. Mining revenues
can significantly boost state revenues in mining dominant states such as Chhattisgarh, Jharkhand,
Goa and Odisha.

(Fig. 15)