Industry Trend Analysis - The Coming Boom In India-Africa Mineral Investment

BMI View : We expect a swathe of Indian companies to venture overseas in the pursuit of copper, coal and iron ore as the economy experiences rapid growth and regulation restricts domestic investment opportunities. We expect Africa to become the key destination for Indian mineral sector investment as the continent is rich in high-grade untapped reserves that India will need as the economy grows.

In line with our expectations, chronic power shortages and a domestic shortfall in coal prod uction combined with significant regulation have encouraged an increasing number of Indian companies to venture abroad in search of mining opportunities. C ompanies such as Coal India Limited (CIL), Vedanta Resources and Tata Power have continued to hunt for investment opportunities in other cou ntries as they seek to plug the growing deficiencies of key minerals , most notabl y c oal, copper, tin and iron ore . S tate-run CIL has recently proposed the signing of a memorandum of underst anding with the South African government in a bid to establish a wholly-owned subsidiary for the development of coal mines . Desp ite holding the largest extractable coal reserves in the world, at approximately 22bnt (billion tonnes), the company has struggled to boost output due to failure in obtaining the necessary environment and regulatory clearances.

India - Coal Production, Consumption & Balance (mnt)

http://www.asia-monitor.com/industry-trend-analysis-coming-boom-india-africa-mineral-investment-feb-2013