Like other global CEOs, Rio Tinto Group‘s Sam Walsh is optimistic about doing business in India due to promises made by Indian Prime Minister Narendra Modi to initiate steps to encourage investment here. A one-window clearance system and easy taxation are some of the reforms that the PM has promised in the recent past, making global businesses like Rio Tinto sit up and take note.
Rio’s diamond project has been pending for years now, and is likely to provide about 30,000 jobs in the diamond cutting trade, one that India dominates. The mining major has already secured an “in-principle” approval for the issuance of a mining lease for the Bunder diamond project from the local government. If and when the Bunder mine is developed and running, hopefully by 2019, it will place Madhya Pradesh on the list of the top ten diamond producing regions of the world.
Talks between Modi and Walsh, as reported by the local media, have focused on the prospect of uranium exports to India and on coal-mining opportunities.
From all indications and by Walsh’s own admission, it could be a year or so before Rio Tinto starts shipping uranium from Australia to India. India and Australia signed the memorandum of understanding for civil nuclear cooperation only late last year, and some expect that the nuclear fuel could start coming to Indian shores later this year.
The other area of interest for Rio Tinto is coal, where the government has indeed initiated reform. The Modi Administration is likely to open up the coal sector to commercial mining by private companies soon, and the move could help mining giants such as Rio and BHP Billiton to mine and sell coal. India, incidentally, has massive reserves of coal, estimated by some experts as the world’s fifth-largest cache.
A report in mydigitalfc.com quoted high-level, unnamed sources in the coal ministry saying that work on identifying the coal blocks to be offered to standalone mining companies had already begun, and a decision to auction a few of these blocks without any end-use restriction would be taken by June.
As reported by MetalMiner last week, the coal mining second ordinance of 2014 includes a provision that grants the power to initiate auction of coal blocks to public and private sector companies for mining.
The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.