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India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India Commodities Sector
Sixth Annual Conference
Dawn of a new era
We are hosting our sixth annual commodities conference amid proposals to
revamp mining legislation, increasing activism from environmentalists, a ban on
iron ore mining in Karnataka, proposals to share profits with the local population
and, for the first time, slower growth in demand for commodities in India. Which
companies will come out stronger from this turmoil? We present 18 companies
along with experts to provide a roadmap to the changes and highlight the
significant opportunity/challenges arising from them.
Steel capacity target 200mnt – where is the iron ore?
In the last decade, no new iron ore mines have been allocated either to steel
companies or to pure mining companies. However, our National Steel Policy
envisages a capacity of 200mt by 2020, a three-fold increase from current
capacity. The recent Supreme Court order to apply a blanket ban on iron ore
mining in Karnataka has raised serious doubts about the possibility of any new
steel capacity being put up without assurance of iron ore. With more than 45mt
of pellet capacity being built up, it is clear that iron ore fine prices in India will
trend upwards while exports will inch downwards. Does this mean advantage to
the existing holders of iron ore resources, who will be able to increase capacities?
Aluminium capacity is here – what about bauxite?
Vedanta Aluminium has sunk in US$5.5bn to put up 1.7mt of aluminium
capacity, which is now stuck for want of bauxite. While arguably Nyamgiri mines
have been stuck in various stages of MOEF clearances, why has the Orissa
government not gone ahead and given some alternate resource as agreed upon
in the MOU? Hindalco’s aluminium project also faces lower profitability prospects
given that its allotted coal block now falls in no-go area. India has the fifth-largest
bauxite resources in the world and only 5% of global aluminium capacity.
Coal – can auctioning be the saviour here?
The Indian government is naturally concerned about coal given its national
importance. Already 40bn t of coal resources have been allocated free to
companies apart from Coal India. Only 40mt of coal is being produced from
these captive mines but expectation is that production will grow to 100mt in the
next 3–4 years. In addition, the government is looking to introduce auctioning of
further coal resources, so that those who are very keen and can pay can take it.
All this will take time; in the meantime, coal imports can only continue to rise for
the next three years. Coal India, on the other hand, has increased coal prices for
non-core users by a hefty 30%. The competitive advantage of captive coal
producers seems to be on the rise.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India Commodities Sector
Sixth Annual Conference
Dawn of a new era
We are hosting our sixth annual commodities conference amid proposals to
revamp mining legislation, increasing activism from environmentalists, a ban on
iron ore mining in Karnataka, proposals to share profits with the local population
and, for the first time, slower growth in demand for commodities in India. Which
companies will come out stronger from this turmoil? We present 18 companies
along with experts to provide a roadmap to the changes and highlight the
significant opportunity/challenges arising from them.
Steel capacity target 200mnt – where is the iron ore?
In the last decade, no new iron ore mines have been allocated either to steel
companies or to pure mining companies. However, our National Steel Policy
envisages a capacity of 200mt by 2020, a three-fold increase from current
capacity. The recent Supreme Court order to apply a blanket ban on iron ore
mining in Karnataka has raised serious doubts about the possibility of any new
steel capacity being put up without assurance of iron ore. With more than 45mt
of pellet capacity being built up, it is clear that iron ore fine prices in India will
trend upwards while exports will inch downwards. Does this mean advantage to
the existing holders of iron ore resources, who will be able to increase capacities?
Aluminium capacity is here – what about bauxite?
Vedanta Aluminium has sunk in US$5.5bn to put up 1.7mt of aluminium
capacity, which is now stuck for want of bauxite. While arguably Nyamgiri mines
have been stuck in various stages of MOEF clearances, why has the Orissa
government not gone ahead and given some alternate resource as agreed upon
in the MOU? Hindalco’s aluminium project also faces lower profitability prospects
given that its allotted coal block now falls in no-go area. India has the fifth-largest
bauxite resources in the world and only 5% of global aluminium capacity.
Coal – can auctioning be the saviour here?
The Indian government is naturally concerned about coal given its national
importance. Already 40bn t of coal resources have been allocated free to
companies apart from Coal India. Only 40mt of coal is being produced from
these captive mines but expectation is that production will grow to 100mt in the
next 3–4 years. In addition, the government is looking to introduce auctioning of
further coal resources, so that those who are very keen and can pay can take it.
All this will take time; in the meantime, coal imports can only continue to rise for
the next three years. Coal India, on the other hand, has increased coal prices for
non-core users by a hefty 30%. The competitive advantage of captive coal
producers seems to be on the rise.
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