A PRESENTATION ON

STRATEGIC ANALYSIS OF MINING

INDUSTRY
Presented to: Dr. B.A. Prajapati
Professor & HOD
SKSBM, HNGU
PRESENTED BY:
AKHANI RONAK (23)
PATEL JAYSEH (39)
PRAJAPATI CHANDRAKANT
(44)

INTRODUCTION
The tradition of mining in the region is ancient and underwent
modernization alongside the rest of the world as India gained
independence in 1947.Theeconomic reforms of 1991and the
1993 National Mining Policy further helped the growth of the
mining sector.India's minerals range from bothmetallicand non
-metallictypes.The metallic minerals comprise ferrousandnonferrousminerals, while the nonmetallic minerals comprise
mineralfuels,precious stones, among others.
Unless controlled by other departments of theGovernment of
Indiamineral resources of the country are surveyed by the Indian
Ministry of Mines, which also regulates the manner in which these
resources are used.The ministry oversees the various aspects of
industrial mining in the country.Both theGeological Survey of
Indiaand theIndian Bureau of Minesare also controlled by the
ministry. Natural gas, petroleumand atomic minerals are exempt
from the various activities of the Indian Ministry of Mines.

HISTORY INDIA
The tradition of mining in the region
is
ancient
and
underwent
modernization alongside the rest of
the
world
as
India
gained
independence in 1947.Theeconomic
reforms of 1991and the 1993
National Mining Policy further helped
the
growth
of
the
mining
sector.India's minerals range from
bothmetallicand
non

MAJOR PLAYERS
India
20 Microns Limited
Ashapura Mince
Bird Group of
Companies
Bombay Mineral
JM Exports
Mitco
Rockwell
Engineering

International
BHP Billiton
Rio Tinto
Vale
Anglo American
China Shenhua
Energy
Coal India Limited
Fortes cue Metals
Group

PRODUCT APPLICATION

Coal
Copper
Nickel
Lead
Gold
Diamond
Silver
Zinc
Platinum

PORTERS FIVE FORCE ANALYSIS

THREAT OF NEW
ENTRANTS
Before the breakup of the De Beers monopoly,
it was virtually impossible for new entrants to
jump into the industry. With forced change in
business practices, stronger implementation of
laws and discovery of diamonds in areas
outside of the De Beers scope of control,
competition has now increased in the market.
There is now room for about 3 more major
players and several smaller niche operators
who often consolidate and manage to compete
in smaller segments.

BARGAINING POWER OF BUYERS

Historically, consumers had no control over
the diamond industry, its pricing and supply.
With an economic downturn in the industry,
there was reduction in demand which lead to
an oversupply problem and reduced prices.
To address this, major companies reduced
mining operations and turned the industry
back to its higher demand lower supply
model. Once again, the buyers power is nonexistent in this industry.

BARGAINING POWER OF
SUPPLIERS
The bargaining power of suppliers in the
mining equipments manufacturing industry
is low as raw materials consist mainly of
basic commodities, steel and copper.
Also, other supplies include basic electrical
components and equipments that go into
the production of OEs. Bucyrus was able to
increase its gross margin in the period
2004 2009 by decreasing cost of sales
by78.8% in 2004 down to 69.6% in 2009.

THREAT OF SUBSTITUTES
The biggest threat to the diamond industry are
from high quality high tech synthetic diamonds.
These directly impact the basis of the value of the
diamond, i.e. the customer perception of its rarity
and value.
The price of diamonds are not a true indicator of
their value or supply. But it is all in the perceptions
of the consumers. With synthetic diamonds,
consumers will begin to challenge the diamond as
a rare natural item and in some places they may
overtake the sale of natural diamonds.

COMPETITIVE RIVALRY
In a change from previous industry
structures, the broken cartel now
means
that
there
is
some
competitive
pressure
from
the
industry. There are still limited
players, but overall, the increased
presence of different companies
means a more competitive market.

PESTEL ANALYSIS

POLITICAL
The mineral resources in India consist of Coal, Iron
ore, Manganese, Mica, Bauxite, Titanium ore,
Chromate, Diamonds, etc. India is the third largest
producer of Coal and Lignite & Barites and the
largest producer of mica in the world.
India is also ranked among the top producers of
Iron ore, Bauxite, Manganese ore and Aluminum. In
2003-2004 India has produced 355 million tones of
coal all of which has been consumed internally.
Coal India Limited is a State owned company which
contributes a bulk percentage in the Coal
production.

ECONOMIC
The Northeast of India is endowed with huge
untapped natural resources and is acknowledged
as the eastern gateway of Indias Look-East Policy.
Nonetheless, the region is cited as a conflictstricken remote corner of India, witnessing a
series of insurgencies and illustrating the
alienation of the locals from the mainstream.
Although the causes of insurgency in the region
have been primarily political, the ambiguity
related to the economic potential has added fuel
to the turmoil.

SOCIAL
The total proved coal reserves in the country are about
101.83 billion tone, which is about 10% of the Global
proved reserves. As per the Integrated Energy Policy,
with the present rate of production these reserves
would last for over 80 years. In the country coal is the
primary energy source and it meets about 55% of
primary commercial energy needs.
The total employment in the coal sector is about
550,000 and hence the total dependents are about
5,500,000.For each person employed there are about
ten dependents, which include five members of the
families of the employee and another five supporting
these families and the mining activities.

TECHNOLOGICAL
The promotion of research and development(r&d), and
an appropriate R&D framework to stimulate the
development of pollution prevention techniques.
The development and diffusion of technology solution
between firms across both the small and large sacle
sectors.
Where possible, the incorporation of rehabilitation
measures during mining process.
The introduction of life cycle assessment approaches as
a generic tool to assist technology choices and support
EMSs.
The need for greater assessment of the social context of
technology development, application, and diffusion.

ENVIRONMENTAL

Issues related with the societyFor establishing the

coal/mineral preparation units land is required for various
uses and the people living on this land will need to be
displaced. Issues related to ecology-The preparation plants
established in forest areas or very close to the forests will
disturb both the terrestrial and aquatic fauna. When
established in agricultural land plants will tend to disturb
the characteristics of top soil.
For effective planning and implementation of CSR, R&R and
Community Development (CD) it is necessary to understand
the impacts of mining and associated activities on the
environmental components and then devising the imitative
requirements to be incorporated in mine planning and
development of CSR, R&R and CD packages/schemes.

LEGAL
In general, resources in India are jointly managed
by central and state government. The proprietary
title vests in the federating states while the
center has jurisdiction over mines and minerals
development. With regard to coal, Mines and
Minerals (Regulation and Development) Act
(MMRDA) was enacted in 1957 where in coal is
listed as a schedule one mineral. This implies that
while ownership of coal resources vests with
state, prospecting and mining are controlled by
central government.
There are large number of laws and regulations
that govern various aspects of coal sector. Some
of these have been extended to coal mining and

SWOT ANALYSIS

STRENGTHS
Labors easily available
Low labour and conversion costs
Large quantity of high quality
reserves
Exports iron-ore to China and Japan
on a large scale

WEAKNESS

Poor infrastructure facilities.

Mining technology is outdated.
Low innovation capabilities.
Labor force is highly un-skilled and
inexperienced.
High rate of accidents.

OPPORTUNITIES
Considerable potential exists for setting up
manufacturing units for value added
products.
There exists considerable opportunities for
future discoveries of sub-surface deposits
with the application of modern techniques.
Current economic mining practices are
generally limited to depths of 300 meters
and 25 percent of the reserves of the
country are beyond this depth

THREATS
Mining
companies
and
equipment
suppliers are under the constant threat of
being taken over by foreign companies.
A heavy tax burden discourages further
investment.
Politicians undervalue the industry's
contributions to the economy.
Stricter environment rules restricting
mining activities

PRODUCT LIFE CYCLE

Exploration Phase
It Involve land issues
bring an influx of a few job.
some economic development through the
purchase of local goods and services.
Design Phase
This phase helps mining companies determine if
and how a project can be safe, environmentally
sound
socially responsible, while meeting or exceeding
regulatory requirements

CONT
Construction phase:
This may take two years or more and involves
building roads, processing facilities
environmental management systems, employee
housing and other facilities
Production phase:
Once construction is complete and systems have
been tested, mineral production can begin
It involves recovering, processing and transporting
the minerals this process last depending on the
size and type of the mineral deposit

CONT
Post Closure Phase:
Upon closing operations, measures must be taken
to address environmental impacts that include
water, vegetation and erosion.
Closure Phase:
a mine has a finite life span, and each site has a
mine closure.
Includes dismantling the facilities and returning
the mine site to a safe, stable and reclaimed
state.
Mine closure takes, on average, one to five years.

VALUE CHAIN ANALYSIS

Exploration
Mining
Concentration
Hydrometallurgy and Biotechnology
Refining
Value addition
General
Physical separation

EXPLORATION

Geochemical sample analysis;

Mineral/ore characterization;
Certified Reference Materials; and,
Artisanal and small-scale mining

MINING
ASSM technology;
ASSM training assistance; and mining
inputs economic studies.

CONCENTRATION
Combination/Flotation
Flow sheet design and optimization,
and piloting;
Plant audits;
Ultrafine milling; and,
Control and optimization strategies.

HYDROMETALLURGY AND
BIOTECHNOLOGY

Atmospheric and pressure leaching;

Bioleaching (refractory gold and base metals);
Solvent extraction and ion exchange;
Electro winning;
Process simulation;
Reagent development and evaluation;
Gold recovery by CIP/RIP;
Activated carbon regeneration;
Uranium processing expertise, and U3O8 recovery;
Cyanide measurement, monitoring and auditing; and,
Leach circuit control.

REFINING
Gold
refining
and
value-added
products/chemicals;
Hydrometallurgical refining of zinc
(PWG
to
SHG),and
off-grade
ferroalloy
fines;
and
Titanium
chlorination technology.

VALUE ADDITION
New industrial applications for gold: Catalysis;
Biomedical; and Nanotechnology;
Smart materials and sensors;
PGM-based super alloys;
Low-nickel stainless alloys;
Jeweler fabrication;
Gold and platinum jeweler alloys; and,
Identification of downstream,
Metals-based, economic development
opportunities.

GENERAL
Ore characterization, analytical and
process mineralogy;
Certified Reference Materials;
Materials characterization, testing and
development;
Engineering
design,
manufacturing,
installation and commissioning;
Project management services; and,
Regional minerals-based studies.

PHYSICAL SEPARATION
Bulk sample preparation;
Gravity, magnetic, electrostatic and
dense-media separation; and,
Pneumatic jigging, and Mineral
Density Separation.

FINANCIAL ANALYSIS

1.Return on Assets
2.Total Assets Turnover
Ratio
3.Net Sales
4.Current Ratio

RETURN ON ASSETS
ROA
30
25
20
roa

15
10
5
0

2014

2013

2012

2011

2010

2009

TOTAL ASSETS TURNOVER RATIO

Assets turnover
1.2
1
0.8
assets turnover

0.6
0.4
0.2
0

2014

2013

2012

2011

2010

2009

NET SALES
Net sales
35
30
25
20

net sales

15
10
5
0

2014

2013

2012

2011

2010

2009

CURRENT RATIO
Current ratio
3.5
3
2.5
2

current ratio

1.5
1
0.5
0

2014

2013

2012

2011

2010

2009

THANK
YOU