ravi INTRODUCTION OF MINERALS[1]22222

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Presentation On :-- METALS

Department Of MBA(FT) 1st

Sem

Session 2009-10Submitted to: - Submitted By:-Prof. :- Amber Tiwari Ravi Kant

&

Mukesh Singh Rathour


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SYNOPSIS OF METALS

y INTRODUCTION

y PRODUCT PROFILE

y MAJOR MARKETS

y COMPETITORSy EXPORT PERFORMANCE

y GOVERNMENT POLICIES

y INDIAN SCENARIO

y IMPACT OF WTO

y SWOT ANAYALISIS

y CONCLUSION

y

SOURCES


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INTRODUCTIONy India is rich in mineral resources with large reserves of primary metal

ores like iron ore, bauxite, chromium, manganese and titanium. India

has

y

13 billion tonnes of iron ore reserves 5th

largest reserve base in theworld

y 2.3 billion tonnes of bauxite reserves 4th largest reserve base in the

world

y 160 million tonnes of manganese reserves 2nd

largest reserve basein the world

y 57 million tonnes of chromium reserves 3rd largest reserve base in

the world


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INTRODUCTION

y Metal is key sector as its meets the requirement of wide range ofimportant industries. According to World Mining Data 2010, Asia was the

leading minerals producer in the world with 7.35 billion (excluding

diamonds and natural gas) metric tons in 2008, a 6.9% increase from

2007.

y In the next 4 years, Indias metals and minerals industry is expected to

reach USD30 billion and to account for 2.5% of Indias GDP. The key

mining sectors like coal, metallic ores and mining equipment will needmajor investments for the coming 5 to 10 years in order to support

Indias high rate of economic growth.


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INTRODUCTION OF MINERALSMinerals are inorganic chemical elements that the body needs for

healthy growth and metabolism.

Many minerals are brought into the food chain of plants andanimals through the soil.

Mineral is neither animal nor vegetable. The study of mineral iscalled Mineralogy


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Minerals

y Minerals are elements of the periodic table.

y More than 25 have been isolated.

y 21 elements have been shown to be essential (excluding C,H, and O).

y Minerals make up about 4 to 5% of body weight (for a 70 kgindividual: 2.8 kg).

y Many minerals are found in ionic form (others as ligands or covalentcompounds).


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Minerals

y Two categories:

y Macro minerals > 0.005%

y Micro minerals < 0.005%

y Macro minerals are generally required in amounts greater than 100

milligrams (mg) per day and stored by the body in quantities greater

than 5 grams (g).

y Micro minerals are generally required in much smaller amounts and

either stored by the body in very small amounts or not stored at all.


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Macro Minerals

Ca calcium 1200 grams

P phosphorus 860 grams

S sulfur 300 grams

K potassium 180 gramsCl chloride 74 grams

Na sodium 64 grams

Mg magnesium 25 grams


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Micro Minerals

F fluorine 2.6 V vanadium 0.018

Zn zinc 2.0 Sn tin 0.017

Cu copper 0.1 Se selenium 0.013

I iodine 0.025 Mn manganese 0.012Cr chromium 0.006 Ni nickel 0.010

Co cobalt 0.0015 Mo molybdenum 0.009

Si silicon 0.024


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The Industry Is HighlyFragmented


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PRODUCT PROFILE

METALS & ARTICLES WITHITC (HS) CODE

Code 72 - Iron and steel Code 74 -

Copper and articles thereof Code 75 - Nickel and articles thereof Code 76 - Aluminum and articles thereof Code 78 -

Lead and articles thereof Code 79 - Zinc and articles thereof Code 80- Tin and articles thereof


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Major markets inmetals


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y Mehta Tubes Ltd.

y ISO 9001:2000

y Manufacturer and supplier of stainless steel products like stainless steel tubes, stainless steel coils,

stainless steel plates, stainless steel pipes, stainless steel strips and stainless steel rods.y Address: No. 920-924, Plaza Panchsheel, 9th Floor, No. 55 Huges Road, Near Dharam

Palace, Chowpatty, Mumbai - 400 007, India

y Phone: +(91)-(22)-43404040 Fax:+(91)-(22)-43404050

Mobile / CellPhone: +(91)-9820204447

Website: http://www.mehtatubes.com/

y Jignesh Steel,Mumbai

y ISO 9001:2000

y Exporter and trader of stainless steel, duplex stainless steel, nickel alloy tubes, copper alloy pipes,

stainless steel pipe fittings, butt weld pipe fittings, round bars, sheets, high tensile fasteners, coils,plates, stainless steel flanges.

y Address: 45, Islampura Street, Shop No. 7, Near Alankar Cinema, Mumbai - 400 004, India

Phone:+(91)-(22)-66595844/66595845

Mobile / CellPhone: +(91)-9869357774/9869288123

Website: http://www.pipe-pipefittings.com/


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y Metal Exports (India)

y Engaged in manufacturing and exporting stainless steel baskets, stainless steel cans, stainless steel

vats, precision stainless steel vats and fabricated stainless steel vats.

y Address: Rampur Road, Near PCF Khad Go down, Vijay Nagar, Moradabad - 244 001, IndiaPhone: +(91)-(591)-2493504/6540433 Fax:+(91)-(591)-2491357

Mobile / CellPhone: +(91)-9837003724

Website: http://www.metalexportsindia.com/

y Steel Tubes (India) Pvt. Ltd.

y Manufacturing and exporting stainless steel, stainless steel pipes, stainless steel tubes, carbon steel,

nickel alloy steel, low temperature carbon steel, alloy steel available in shape of pipes, tubes, rods,

sheets, plates, wires and angles.

y

Address:Ashtavinayak Building, Office No. 303, 3rd Floor, Sadanand Wadi, V.P.Road, Girgaum,Mumbai - 400 004, India

Phone: +(91)-(22)-61432000/23895908/23822821/66393996 Fax:+(91)-(22)-

23895906

Website: http://www.stindia.co.in/stainless-duplex-steel-tubes.html


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Profile of key players


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Copper

A ductile malleable reddish-brown corrosion-resistant diamagnetic metallic

element; occurs in various minerals but is the only metal that occurs abundantly

in large masses; used as an electrical and thermal conductor.

World Copper Markets

LME

NYMEX


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MAJOR MARKETS OF COPPER

y Theseven leading refining nations are:--

y UNITED STATES

y JAPANy CHINA

y CANADA

y ZAMBIA

y BELGIUM

y FEDRAL REPUBLIC OF GERMANY


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Factors Influencing Copper Markets

Copper prices in India are fixed on the basis of the rates that rule onLME the preceding day.

World copper mine production through exploration of new mine andexpansion of existing mine.

Economic growth of the major consuming countries such as China,

Japan, Germany etc.

Growth and development in the Building, electronics and electricalindustry


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Per Capita Consumption of Coppe2009 Data


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Hindalco & Sterlite account formore than 90 % of the output


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Zinc production & consumption

have been increasing, primarily


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Industryanalystsreports, October2008

&

http://trade.indiamart.com

Sources:


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yIndia has very low penetration levels of

key metals, indicating high potential

for growth.

yIndias penetration levels are

substantially lower, not only when

compared to mature markets, but also

countries like China.


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Gold

A very ductile and malleable, brilliant yellow precious metal that is

resistant to air and water corrosion.

It is a precious metal that is very soft when pure (24 Kt.).

Gold is the most malleable (hammer able) and ductile (able to be

made into wire) metal.

The purity of gold jewelry is measured in karats. Some countries

hallmark gold with a three-digit number that indicates the parts perthousand of gold. In this system, "750" means 750/1000 gold

(equal to 18K); "500" means 500/1000 gold (equal to 12K).

Alloyed gold comes in many colors.


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WorldGold Markets

London as the great clearing house.

NewYork as the home of futures trading.

Zurich as a physical turntable.

Istanbul, Dubai, Singapore and Hong Kong as doorways to important

consuming regions.

Tokyo where TOCOM sets the mood of Japan.

Mumbai under India's liberalized gold regime


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India in WorldGold Industry

(RoundedFigures)

India (In Tons) World (InTons)

% Share

Total Stocks 13000 145000 9

Central Bank holding 400 28000 1.4

Annual Production 2 2600 0.08

Annual Recycling 100-300 1100-1200 13

Annual Demand 800 3700 22

Annual Imports 600

Annual Exports 60


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Major gold producing countries

South Africa

United States

Australia

China

Canada

Russia

Indonesia

Peru Uzbekistan

Papua New Guinea

Ghana

Brazil

Chile

Philippines

Mali

Mexico

Argentina

KyrgyzstanZimbabwe

Colombia


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Steel trade out of India has alsobeen going up


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Belgium and USA are key exports

markets


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China and Korea are the key

sources for imports


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India is the fifth largest Producerof crude steel


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The steel sector in India has beengrowing rapidly


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Rapidly While production of pigiron has been fluctuating over the

years


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Production, Consumption andGrowth of Steel


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Year Totalfinishedsteel (alloy+ non-alloy) ('000 tonne)

Productionforsale Import Export Consumption

2004-05 43513 2293 4705 36377

2005-06 46566 4305 4801 41433

2006-07 52529 4927 5242 46783

2007-08 56075 7029 5077 52125

2008-09 57164 5841 4437 52351

Apr-Dec 2009-10 43849 5210 2099 40997


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Export Import Data Bank, Ministry of Commerce, GoI -

www.commerce.nic.in

Source:

Th Al i i i I di i


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The Aluminium sector in India isconcentrated among three key

players, and is growingGroup KeyPlayers

Aditya Birla Group Hindalco Industries Limited

Indian AluminiumCompany Limited

(Indal)

Sterlite Industries

Bharat AluminiumCompany Limited

(Balco)Madras AluminiumCompany

Limited (Malco)

Public Sector National AluminiumCompany Limited


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Primary Aluminium Production


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Aluminium consumption bysector-2008


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Per Capita Consumption ofAluminium


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ICRA Industry report Metals: Aluminium and Copper, June

2008

Source:


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Government Policiesy TheGovernment ofIndia has introducedseveral policyinitiatives to

give a boost to themetalssector:

y The Mines and Minerals (Development and Regulation) Act, 1957, (MMDR) and

the Mines Act, 1952, together with the rules and regulations under them

constitute the basic laws governing the mining sector. Further, the Government has

formulated the National Mineral Policy, which was revised in 1994 to permit

private investment in exploration and exploitation of 13 specified minerals.

y Thirteen minerals that were reserved for the public sector have been opened out for

private sector investment. These include iron ore, manganese ore, chrome ore,

sulphur, gold, diamond, copper, lead, zinc, molybdenum, tungsten, nickel and

platinum.

y Duty on nickel reduced from five per cent to two per cent to help domestic stainless

steel manufacturers tackle increase in global prices for raw materials.


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Foreign equity holding allowed up to 100 per cent through automatic

route for all non-fuel, non-atomic minerals except diamond and precious

stones.Steel

G The National Steel Policy (NSP) 2007 lays emphasis on improving

productivity, efficiency, cost, quality and product mix for accelerating growth

in the domestic production and consumption of steel.

G Import duties on various steel products have been reduced from 15 per

cent to10 per cent. Customs duty on alloy and stainless steel has been reduced

to five per cent.

G Duty on nickel reduced from five per cent to two per cent to help

domestic stainless steel manufacturers tackle increase in global prices for raw

materials.


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Copper

G Copper and copper products can be imported at zero duty from

Sri Lanka under the Free Trade Agreement (FTA) with that country.

G Duties on copper and copper products have been progressively

reduced for example, customs duty has been reduced from 35 per cent

in 2001 to 10 per cent in 2007.


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Indian Scenario

The size of Indian Copper Industry is around 4 lakh tons, which as

percentage of world copper market is 3 %.

Birla Copper, Sterilite Industries are two major private producers andHindustan Copper Ltd the public sector producers.

India is emerging as net exporter of copper from the status of netimporter on account of rise in production by three companies.

Copper goes into various usage such as Building, Cabling for power andtelecommunications, Automobiles etc. Two major states owned

telecommunications service providers; BSNL and MTNL consume 10% ofcountry's copper production. Growth in the building construction andautomobile sector would keep demand of copper high.


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Global Scenario Economic, technological and societal factors influence the supply and demand of

copper. As society's need for copper increases, new mines and plants are introducedand existing ones expanded.

Land-based resources are estimated at 1.6 billion tons of copper, and resources indeep-sea nodules are estimated at 0.7 billion tons.

The global production of refined copper is around 15 million tons.

The major copper-consuming nations are Western Europe (28.5%), the UnitedStates (19.1%), Japan (14%), and China (5.3%).

Copper and copper alloy scrap composes a significant share of the world's supply.

The largest international sources for scrap are the United States and Europe.Chile, Indonesia, Canada and Australia are the major exporters and Japan, Spain,

China, Germany and Philippines are the major importers.


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Source:

y www.chemicals.nic.in/petro1.htm


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Many Indian players are lookingat expanding capacities

y Sterlite and Hindalco (Birla Copper, the copper division of Hindalco) are lookingat adding significant smelting capacities in the coming years. Birla Coppersexpansion plan to double capacity from 250000 tonnes per annum (TPA) to500000 TPA will make it one of the top 10 copper producers in the world.

y Sterlite Industries has made a higher $2.57B bid for Asarco, topping rival GrupoMexico's offer.

y Essar Steel will invest US $ 213 million in setting up steel processing units inIndia, the Middle East and North America.

y Hindalco Industries, an integrated producer of aluminum and a leading coppermanufacturer, has drawn up a US $ 3.4 billion capex plan for the next two years.

y Tata Steel plans to invest US $ 8.5 billion over the next five years to ramp up itsproduction capacity to 16 million tonnes.


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Attractive States For Investmenty Rawmaterialsuppliesforkeymetals is concentratedin

somestates:

y CopperreservesBihar, Rajasthan, Madhya Pradesh

y B

au

xiteOrissa, Chattisgarh, Karnatakay Iron OreOrissa

y Access to supply of raw materials, labour and energy are key

requirements for setting up operations in this sector.

y Based on these factors, Orissa, Chattisgarh, Madhya Pradesh, AndhraPradesh and Karnataka could be attractive locations for investment

in the sector.


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SWOT

yANAYALISIS

S G


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STRENGTHMetals is a key sector in India.

The government offers a wide range of concessions to investors in India,engaged in mining activity.

India is the fifth largest producer of crude steel.

Labours are easily available.

Capital goods imported for mining under EPCG scheme qualify forconcessional customs duty subject to certain export obligation..

Minerals in their finished form exempt from excise duty.

Large quantity of high quality reserves


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WEAKNESS Poor infrastructure facilities.

Mining technology is outdated. Low innovated technology & capability.

Labour force is highly un-skilled & in-experienced.

High rates of accidents.

Most of the Indian companies dont hve access to Indian market.

High rates of illegal mining. There is a lack of respects for the mining industry & it suffers from the incorrect

perception.

There is long lead time in production decision.

Lack of R&D programs and training and development


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OPPORTUNITY Growth in manufacturing and infrastructure is fuelling demand for steel products, thereby driving

growth in the sector.

Steel trade out of India has also been going up.

The country has rich reserves of minerals, ores.

Growing, skilled manpower base.

Growing domestic market as well as exports across segments.

Estimated 82 billion tones of reserves of various metals yet to be topped.

The production of aluminium has been growing at a CAGR of over 10 per cent & indicating the scope

& need for new capacities.


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THREATSy A heavy tax burden discourages further investment.

y Foreign Investment in the Mining Sector.

y Large integrated international metal manufacturers like mittal

steel,JindalSteel & Power Limited,Hindustan Copper Limited

(HCL),NALCO, etc,announced plans for expansion in India.

y Politicians undervalue the industry's contributions to the economy.


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Companys Performance2009 - 10

(Rs In


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(Rs. In

million)

2009-10 2008-09

Exports 32228 45759

Imports 399690 306951

Domestic 19324 15497

Other trade earning 1397 1967

Net sales/ Trading earning 452639 370174

Trading profit 3176 3209

Profit before taxes 3331 2174

Profit after taxes 2162 1402

Dividend

1) Interim dividend on equity share ----------- 200

2) Proposed Dividend 450 200

3) Dividend Tax 75 68

Reserve & Surplus 12371 10734


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SOURCES:

y Ministry of Steel, GoI; World Steel Association.

y Export Import Data Bank, Ministry of Commerce, GoI; -

www.commerce.nic.in

y ICRA Industry report Metals: Aluminium and Copper, June 2008

y ICRA Sector Analysis, June 2008

y Industry analysts reports, October 2008

y www.chemicals.nic.in/petro1.htm

y www.indiamart.com


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CONCLUSION

y Metals is a key sector as it meets the requirements of a wide range ofimportant industries.

y The metal products exporters have done a manyservices to nation. Theyhave been major contributors to economic growth, GDP, of India . The

prospects of the industry looks bright. Many Indian players are looking at

expanding capacities of metals in India. Sterile and Hindalco (BirlaCopper, the copper division of Hindalco) are looking at adding significantsmelting capacities in the coming years. Birla Coppers expansion plan todouble capacity from 250000 tonnes per annum (TPA) to 500000 TPA willmake it one of the top 10 copper producers in the world.

y Essar Steel will invest US $ 213 million in setting up steel processing unitsin India, the Middle East and North America.

y Tata Steel plans to invest US $ 8.5 billion over the next five years to rampup its production capacity to 16 million tonnes.

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ravi INTRODUCTION OF MINERALS[1]22222