With consistent investor-friendly messages being sent out, diversified global mining giant Rio Tinto has turned bullish on India. The investor-friendly noises that the Modi government’s been making in the last few months seem to be the primary reason. In the last few days, Rio Tinto has announced or indicated renewed interests in kickstarting a spate of projects across sectors.
For starters, Rio said it was firm on investing $2 billion to set up an iron ore project in India’s eastern state of Odisha. Rio already holds 51% of the Odisha iron ore venture, which is expected to yield as much as 20 million tons a year when it starts.
Another $500 million have been earmarked on a diamond mine in the central province of Madhya Pradesh, Group Chief Executive Officer (CEO) Sam Walsh told the Indian media recently. Aside from these projects, the Rio Tinto Group, one of the largest exporters of uranium from Australia, is also in the running to ship nuclear fuel to India.
The first two projects are, as is typical in India, still require relevant clearances. A report in The Hindu BusinessLine quoted Walsh saying he held talks with Indian Prime Minister Narendra Modi on the planned investment in the Bunder diamond mine in Madhya Pradesh.
The CEO told reporters that Rio Tinto though was hopeful that the varied permissions, environment included, would come through fast. Mr Walsh also revealed that he had met the Prime Minister thrice since he took office, and discussed the 2 projects and other opportunities.
Like other global CEOs, Walsh’s optimism stems from the promises made by Modi to initiate steps to encourage investment in India. A one-window clearance system and easy taxation are some of the reforms that the Prime Minister has promised in the recent past, making global businesses like Rio Tinto sit up and take notice.
The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.