India is a country with abundant mineral resources. It has the fifth largest iron ore reserves and 6th largest bauxite reserves in the world. With 302 billion tonnes of coal reserves, 3108 operational mines and mining lease granted for 20 – 30 years, the government is looking to increase the current share of mining and quarrying in GDP from current 2 % to an optimistic 5% in the next 20 years. The country is expected to grow by 7% in the coming years driven by the good performance of manufacturing, infrastructure and automobiles. This will push up the demand for power and steel. India would be the second largest producer of steel by the end of this year. An interesting analysis projects that every 1% increase in the mining growth rate eventually pushes 1.2 -1.4 % increase in the industrial production growth rate, which subsequently increases India’s GDP growth rate by 0.3%. Hence, the metal and mining sector is a significant growth propeller, and the government seems to be cognizant of this fact. 100% FDI is permitted in the sector. This year, the Mines and Minerals (Development and Regulation) Amendment Bill was passed by the government which will facilitate auctioning of mines and bring transparency in the process with proper regulation. The cost incurred on raw materials is likely to go down and this would be a major boost for the mining sector.
Business Challenges facing the Mining Sector
• Regulatory Challenges – The transfer of mining leases is difficult. The system lacks transparency. Getting agency approvals is a time-consuming process.
• Lack of Infrastructure- Many mines are located in remote areas leading to logistic and transportation issues.
• Sustainability – There are environmental concerns in the regions where mines are set up. The adverse effects on the environment and the community in general need to be minimized to make mining sustainable.
• Everyone is well aware of the fact that the metals and mining industry is deeply influenced by mega-trends prevalent on the global front. These mega-trends have a significant impact on global socio-economic subjects, which include business, society, culture and the economy.
• Lack of skilled talent, ineffective execution and unmet revenue expectations of government are some of the other key challenges.
How C1 India adds value?
From managing reverse e-Auctions for transportation, outsourcing contracts and wagon loading to other critical elements of electronic tendering C1 India adds value by helping you procure at competitive price in a thin procurement timeline through a streamlined and fair process. Having executed more than 250,000 e-tenders for Indian and international businesses, we bring the best practices and leadership experience in e-Procurement and e-Auctions.
Several large public sector units such as Central Coal Fields Ltd trust C1 India for procuring goods and services through an automated process. We provided an e-tender software solution to Central Coal Fields Ltd which provided online negotiation at the best price without compromising on the transparency. CCL adopted our process in 2010 and it went on to win the e-India Award for excellence in e-Procurement’ in 2013.
Reach us today to know more why we continue to be the preferred partner for several large businesses.