Volume 9 Edition 2 2012 - The ASIA Miner

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India India next Asian hub for mining and construction equipment By Faseem T and Md Abdul Samad, research analysts, Beroe Inc THE Indian mining and construction equipment industry has a bright future in the next five years owing to the government encouraging foreign investment in the equipment manufacturing sector. A number of major mining and construction equipment manufacturers have announced big investments in India. There is a large demand for coal from the cement industry and power sector in India while increasing consumption of steel has also improved the prospects of iron ore mining. The construction industry in India is also expected to grow to a size of about US$6.5 billion by 2014, according to estimates from the Confederation of Indian Industries (CII). These factors are expected to drive the equipment market in India. In the case of excavators, the market was expected to grow by 30% in 2011 alone. In order to meet its burgeoning equipment demand, India is highly dependent on China, with 60% of heavy equipment sourced from China. Construction and mining equipment imports from China amounted to about US$300 million in 2010-11. The price sensitivity of Indian consumers is one of the reasons Chinese equipment is preferred. Chinese manufacturers like Guangxi LiuGong Machinery have a good presence in India. The company started selling its products in India in 2002 and with the growth in demand for its products, its subsidiary LiuGong India Private Limited started a manufacturing unit for heavy earthmoving and construction equipment at Pithampur, Madhya Pradesh. Among the Indian companies, BEML Ltd, a public sector company, is well poised to garner a good share in the market. BEML exports mining equipment to more than 24 countries in Asia, Europe and Africa. It also has a wide range of equipment for both surface and underground mining. With the experience it has in the industry, the company has even ventured into contract mining in foreign countries. BEML- Midwest Ltd, a joint venture of BEML with Indonesian partners Midwest Granite Ltd and PT Sumber Mitra Jaya, is looking forward to bidding for mining contracts in India and abroad. Major players like Caterpillar, Volvo, Hitachi, etc are expected to reduce Chinese dominance by investing in new and existing production facilities in India. Major companies are trying to ramp up their capacities in various mining and construction equipment areas. In September 2011 Volvo came up with two excavator models, the EC210B Prime and EC290BLC Prime (21 ton and 30 ton excavators), from its plant at Bangalore. The company plans to increase production by three times during the course of the next year to meet increased demand. Telcon, a joint venture of Tata Motors from India and Japan’s Hitachi, is the current leader of excavators in India. They have a good customer base especially for their crawler excavators and can capitalize on existing customer relations. Hyundai Construction Equipment India Private Ltd is another global player planning to improve sales in India. In November 2011 they launched their 34 tonne R-340 LC-7 excavator in India. The company is currently importing its high-end excavators, which fall into a range of operating weights from 30 tonne to 80 tonne, from South Korea. Caterpillar is keen to expand its presence in India through its tie up with Tractors India Limited (TIL) and Gmmco. The company sells its trucks, backhoe loaders and excavators through Indian outlets of TIL and Gmmco. Caterpillar, being the world leader in mining and construction equipment, is expected to take advantage of its expertise in the field. As part of its 2015 corporate strategy, Caterpillar is looking forward to increase the manufacturing capacity of a wide range of products in emerging economies like India. The company invested US$62 million in its off-highway truck manufacturing facility in Chennai in November 2011. This is in addition to an investment of US$108 million Caterpillar made in the Chennai facility in 2010. The company also plans to start a new facility to manufacture its Perkins branded 4000 series engine, which will involve an investment of US$150 million. Worldwide, the company plans to invest US$800 million over the next five years to increase its capacity for large excavators and haul trucks used in mining applications. Another major player to look up to is the JCB. The UK-based excavator manufacturer has captured a major share in the backhoe loader market in India. The advantage with JCB is its large network of retail outlets. The business model of having retail outlets is different from the model followed by other players in India. Most of the players focused on having tie-ups with institutional clients while the JCB focused on retail outlet-based sales. Even though JCB group has mining equipment in its portfolio, it has kept away from the mining sector in India. However, as the Indian mining sector opens up, JCB is expected to introduce its mining equipment and expects to leverage the benefits of its closeness to customers through retail outlets as well as its good service network. With the growth in mining and construction equipment, a number of other related industries are also expected to come up. In December 2011 Wipro Infrastructure Engineering of India announced a joint venture with Kawasaki of Japan to set up a manufacturing unit in Bangalore for hydraulic pumps used in excavators. The plant is expected to become operational by July 2012 and will manufacture pumps used in excavators within a range of 7 tonnes to 10 tonnes. Mining and construction equipment distribution in India is not as well organized as in other countries. Currently, different players have different distribution models. Komatsu is distributing equipment through its partner L&T’s distribution network while Hitachi sells equipment through a number of distributors. In certain Indian states there are multiple players distributing Hitachi equipment. Kobelco and Volvo are also following a similar distribution model to Hitachi. Caterpillar equipment is distributed by TIL in north and north-eastern India and Gmmco in the peninsular region. In the coming years, major players are expected to improve their distribution as well as service network. The expected robust growth in India’s mining and construction sectors will open new avenues for equipment manufacturers. The Indian construction equipment market is expected to grow to an annual average of about 70,000 units during the five year period from 2011 to 2015. Big players are expected to take advantage of the supportive policies of the government on a large scale. The huge investment and renewed market strategies of major players are expected to change the dynamics of the Indian mining and construction equipment industry in the next few years. 58 | ASIA Miner | March/April 2012
India Ganajur Main gold resource increases 16% Outcropping of gold-bearing rocks at Deccan’s Ganajur Main project. There are an estimated 93,000 tonnes of inferred resources in the sulphide zone @ 1.82 grams/tonne for 5000 ounces and a further 17,000 tonnes in the oxide zone @ 3.26 grams/tonne for 2000 ounces. The total inferred resource is now estimated at 109,000 tonnes @ 2.06 grams/tonne for 7000 contained ounces. The new estimate is limited to the material that has reasonable prospects for eventual economic extraction by constraining this within an optimized pit shell. The modelled gold zones extend from surface to a depth of about 120 metres and the resources are reported at a cut-off grade of 1.0 gram/tonne gold. Deccan Gold Mines has also carried out comprehensive metallurgical studies at the AMMTEC Laboratory in Australia as part of the scoping study. The results are being studied in association with SRK to derive a suitable flow sheet and plant design for a proposed processing plant at Ganajur Main with a daily capacity of 2000 tonnes. The Government of Karnataka has issued an order agreeing to allot land and water required for the establishment of a gold processing plant near Ganajur and Deccan is working with local authorities to finalize a site. The mining lease application of Deccan’s subsidiary, Deccan Exploration Services Private Ltd, over the Ganajur Main prospect and covering an area of 0.29sqkm is under consideration of the Indian Government’s Ministry of Mines to whom it was recommended by the State Government of Karnataka. THE mineral resource at Deccan Gold Mines’ Ganajur Main gold prospect in southern India has increased by more than 16% to 308,000 ounces, of which more than 90% is in the indicated category. The revised estimate is part of an ongoing scoping study at the prospect to evaluate the economic viability of an open pit mine at Ganajur Main. The JORC-compliant estimate was prepared by SRK Mining Services India, which estimated the initial resource statement for the project in 2010. Deccan retained SRK in February 2011 to undertake a scoping study to assess the mining potential of the prospect, which is in the Ganajur-Karjagi Block of Haveri district in the State of Karnataka. This process has involved Deccan carrying out further exploration, including infill and step-out drilling. There are now estimated to be 1.921 million tonnes of indicated resources in the sulphide zone @ 3.83 grams/tonne gold for 237,000 contained ounces and 631,000 tonnes in the oxide zone @ 3.19 grams/tonne for 65,000 contained ounces. This makes for total indicated resources of 2.552 million tonnes @ 3.67 grams/tonne for 301,000 ounces. Gold-bearing rock at a Deccan Gold prospect. March/April 2012 | ASIA Miner | 59
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March/April 2012 | Volume 9 | Issue
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From The Editor Indonesia a hotspot
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Indonesia Kopex funds to complete T
Page 12: Indonesia 1.18 million ounce maiden
Page 15 and 16: Indonesia Encouraging assays from Z
Page 18: Indonesia Waterfall drilling confir
Page 22 and 23: ’ ’ Project Survey 2012 Annual
Page 24: ’ ’ Project Survey 2012 Mine In
Page 28: Project Survey 2012 Project Name Lo
Page 31 and 32: No job too big MULTIFLO ® Dewateri
Page 34: China Production imminent from Jian
Page 38: China Sino Prosper seeks Guizhou go
Page 42 and 43: Mongolia Coking coal confirmed at N
Page 44: Philippines Study progresses for Ma
Page 48 and 49: Vietnam Feedstock negotiations for
Page 50 and 51: Australia Bandanna on track for 201
Page 52 and 53: Australia Aquila approves Eagle Dow
Page 54 and 55: Malaysia Lynas receives temporary l
Page 56 and 57: Papau New Guinea Final green light
Page 58 and 59: Central Asia Plant commissioning un
Page 62: 2012 Calendar PDAC 2012 March 4-7,
Page 65 and 66: Drilling & Blasting On the other ha
Page 67 and 68: Drilling & Blasting Playing it Stra
Page 69 and 70: Supplier News -35 to +35). To prote
Page 72: ADVERTISING INDEX AEL Mining Servic
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Volume 9 Edition 2 2012 - The ASIA Miner

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