Robust movement in Indian Economic Growth corridors has led to an increased demand for Australian minerals and technology, notwithstanding bumpy ride ahead
Melbourne, Oct 17: India is set to be the world’s most populous country in the next 10 years and forging ahead to be the second-biggest economy in the world.
India’s population has propelled India’s strong economic growth and an increased demand for Australian mineral resources and mining equipment, technology and services.
This, according to Minerals Council of Australia (MCA)’s New Frontiers project report, should generate big opportunities for both countries while presenting significant challenges for doing business.
MCA’s New Frontiers report, based on research by Trading Nation Consulting outlines prospects for resources trade and solid engagement between Australia and India on mining-related investment, mostly based on mining equipment, technology and services (METS).
The New Frontiers project is identifying opportunities for Australia to boost mining and mining services exports and investment in Asia.
In a statement, Tania Constable, Chief Executive Officer said, “India represents a major opportunity but also presents big challenges for doing business – with inconsistent application of taxes and regulation, onerous bureaucracy and a tough business environment where price prevails over value for money.
“These challenges will not disappear quickly, and developing the Australia-India economic relationship will be a bumpy ride”.
Alongside, Indian publication of ‘New frontiers: South and East Asia’ finds that Indian companies are interested in investing in Australian resources and land, but struggle with Australia’s regulatory system and political campaigns targeting foreign investment.
The research conducts country-level stocktakes of trade barriers and other impediments to Australian mining and mining services trade and investment.
The latest report comes as Australia looks to finalise its India Economic Strategy following the release of the Varghese report earlier this year. The Varghese report identified resources and METS as a key sector, where Australia has competitive advantages in the evolving Indian market.
Opportunities for the Australian minerals and METS sector include:
- Indian thermal (energy) coal consumption rising faster than any other major economy because of augmented electrification in that market
- A tripling of crude steel production driving consumption of metallurgical (steel-making) coal, which India would need to import (along with nickel, chromite and manganese ore) given that it has no viable deposits
- Rising demand for nuclear energy and the need for imported uranium
- Rapidly growing demand for lithium and rare earth minerals from expanding use of electric vehicles, along with imported copper ores and concentrates and cobalt
- The supply of a wide range of technologies and services by Australian METS firms as India’s mining sector grows and modernises.
Launching the Report in Canberra, Monday, Hon Simon Birmingham, Minister for Trade said Asia is most important market, accounting for over 80 per cent of mining sector’s exports.
— MineralsCouncilAust (@MineralsCouncil) October 15, 2018
The mining sector is Australia’s biggest export industry, generating $181 billion in exports in 2017-18.
Notably, for Australian mining industry, India represents a market where domestic supply and demand remains tight with the coal sector yet to be introduced to the reform agenda.
In February 2018, the Indian Government announced it would open commercial coal mining to private-sector companies, including international firms and it is understood that Australian METS firms will play a considerable role in this process.
High Commissioner of India in Canberra, Dr Gondane was also present at the launch of New Frontiers South and East Asia -India interacting with all stakeholders of the Australian METS Sector.
HE Dr. Gondane at the launch of @MineralsCouncil ‘s “New Frontiers South and East Asia -India” @ParliamentHouse today. He interacted with Hon. Trade Minister @Birmo and other stakeholders of the Australian METS Sector. pic.twitter.com/dRxvA4EMW3
— India in Australia (@HCICanberra) October 15, 2018
New frontiers: INDIA FOCUS with South and East Asia is a research study by Mike Adams, Nicolas Brown and Ron Wickes – partners of Trading Nation Consulting; Minerals Council of Australia.
feature image: (from left) Minister for Trade, Tourism and Investment Senator Simon Birmingham; Minerals Council of Australia CEO Tania Constable; and Indian High Commissioner to Australia Dr Ajay Gondane at the launch of New Frontiers: India