The metals and mining sector was down in the dumps last year, hit by a host of issues. One, global commodity downturn was hurting prices. Two, local demand was tepid due to an economic slowdown. Three, the local mining industry was stuck in regulatory and legal issues, such as delays in obtaining clearances and mining bans.
While the global factors continue to weigh on the sector — the S&P BSE metal index is down 17 per cent in the past year — some much-needed respite has been seen on the regulatory front. The Mines and Minerals (Development and Regulation) Act, passed in January 2015 could help the mining sector. The provisions in the Act — such as auction process for allotment — could increase transparency in allotment. Other amendments, such as setting time-bound limits for approvals are favourable to miners.
But iron ore producers, which faced bans in States, such as Karnataka and Goa, are now hit by slumping prices — iron ore prices are down by over 60 per cent in the last year. Prices of other metals, could remain low.
One key beneficiary of the government’s mining push is State-owned Coal India. Its output rose by 10.7 per cent y-o-y to 41.52 million tonnes in April 2015.