Madhya Pradesh: Means business

Mineral Industry

Overview
Overview Madhya Pradesh (MP) State that means business
MP is the second largest State in the Country stretching over 308,000 sq kms.

The State is blessed with large mineral resources of coal, diamond, limestone, methane etc.
MP is among the top 4 states of the Country for industrial investments.

Economic Snapshot

Madhya Pradesh is emerging as a key growth center for the Country Per capita GSDP Manufacturing sector
(Registered & Unregistered)

Gross state domestic product (GSDP) Average growth rate

USD 23,983.63 Mn** 5.5% per annum

USD 369** USD 8.5 bn**

Advantage MP

Madhya Pradesh has one of the upcoming industrial base in India Total electricity generation capacity Indias first greenfield SEZ Industrial Centers 6,449.25 MW* Indore SEZ 8

The State is centrally located Investor friendly Government policies

Power

Electricity generation capacity at present is 6,449.25 MW and estimated to rise to a surplus in 2008-09 MP is rich in low grade coal suitable for power generation. Potential of hydro-energy generation. Installed power capacity (MPs share) Hydel Power Generation: 852.7 MW* Thermal Power Generation: 2,147.5 MW*

2
*Ministry of Power (powermin.nic.in) **Source: Indiastat.com (as on 23 Feb 2006)

Enabling Infrastructure
The State is well connected with the rest

RAILWAY NETWORK

of India with almost 425 trains passing through the State on a daily basis. Of these 175 trains pass through the State capital Bhopal alone.

MP IS CENTRALLY LOCATED AND WELL CONNECTED WITH ALL MAJOR CITIES IN INDIA

25 airstrips.** Convenient air links from key Indian

GWALIOR

AIRPORTS

cities like Delhi & Mumbai to Bhopal, Jabalpur, Gwalior, Indore and Khajuraho.
KHAJURAHO

5 operational airports. Indore airport has the capability of

INDORE

BHOPAL JABALPUR

handling international cargo.

An international airport proposed in

Bhopal.

The total length of roads spanning MP is

67,600 kms.**

ROAD NETWORK

National highways of 5,200 kms run

through the State.*

18 National highways including trunk

routes of Delhi-Mumbai, Delhi-Chennai, Delhi-Bangalore, Delhi- Hyderabad.

The total length of State highways in the

State is 9,885 kms.**

Convenient linkages to western ports i.e.

Kandla Port, Jawahar Nehru Port Trust.

3
*Source: Department of Road Transport & Shipping (morth.nic.in) **Source: www.destinationmadhyapradesh.com

Madhya Pradesh: A Preferred Investment Destination

31% of the State under forest cover with a largely unexploited species of rare, valuable medicinal- herbal plants Over 2,000 kms of roads being developed with Private Partnership (BOT) Indias 1st operational Greenfield SEZ at Indore Offers diverse tourists destinations catering to various segments of tourism such as religious (Bhojpur), eco/ adventure (Panchmari), heritage (Sanchi, Khajuraho) tourism etc.

Over 100 agricultural farms with an area of over 20,000 acres is available on lease to investor

Third largest producer cement in India*

of

Favourable climatic conditions for cotton and over 40,000 powerlooms are driving the textile industry

Various blocks available for power, cement, iron and steel units

Largest producer of pulses and oilseeds in the Country (~75% of soyabean production)

Over 18,000 technical graduates and 230,000 graduates add to workforce each year

Availability of coal and natural gas (G.A.I.L pipeline) along with support from Government to make investment in Thermal Power Plants lucrative

Over 144 BCM of coal bed methane reserves available

12 blocks with reserves totalling 2,585 million tons of coal has been identified

4
*Source: www.mpsidc.org & Brochure: MP Means Business

MP: The Right Place with the Right Environment

Savings in Office Space Rates Fastest mover* in overall performance among the big States in the Country.

DESTINATION MADHYA PRADESH

(A comparison of rates in Central Business Districts)

Mum bai 150 Ahem adabad 100 Delhi

50 Bhopal 0 Bangalore

Fastest mover in agriculture

Indore Chennai

Delhi (740 Kms) (MPV - 789.5)

Hyderabad

Pune

Fastest mover in infrastructure development.

Ahmedabad (570 Kms) (MPV - 220.63)

Bhopal and Indore have substantial cost advantages, even when compared to other Tier III and IV cities.
Kolkata (1350 Kms) (MPV - 613.19)

Ranks 2nd in terms of governance.

Savings in Land Cost

Vishakapatnam 100% 80%

Mumbai (780 Kms) (MPV - 1000)

(Estimated Values for Multiproduct SEZs)

Pune (800 Kms) (MPV - 206.51)

Ranks 3rd in terms of law & order

Bangalore (1400 Kms) (MPV - 254.52)

Hyderabad (840 Kms) (MPV - 257.9) Chennai (1430 Kms) (MPV - 362.84)

Key Markets (Distance From Bhopal) MPV Market Potential Value

Indore

60% 40% 20% 0%

Chennai

Jaipur

Greater Noida

Cost of skilled labour is USD 2.4/day vis-a-vis USD 3.5 USD 4.0/day in metros MP is centrally located. The State is at an easy distance from all the key consumer markets in the Country.

Chandigarh

* Fastest mover is the State where the rate of improvement between 2003 & 2006 was greater than that between 1991 & 2003

The cost of land is one of the lowest in the Country. Even central hubs such as Indore and Bhopal fare well against other cities in terms of low land cost.

5
**Source: India Today (September 06 Issue) Source: (Reference: RK Swamy) - Distances rounded off

Industrial Policy: Catalyst for the Investments

The Government of MP has devised an investor friendly industrial policy, which is aimed at achieving global competitiveness. The policy emphasizes on industrial growth in the state through adopting cluster approach, establishing specialized infrastructure and offering favourable incentives.
The main thrust of this policy is: Establishment of a Madhya Pradesh Trade Facilitation Corporation which would take and Investment decisions about
SPECIAL INCENTIVES
Special package for Mega Projects on project basis by apex level investment promotion empowered committee headed by the Chief Minister. Industrial investment promotion assistance 50% to 75% of commercial tax for 3-10 years Concessional registration charges and stamp duty exemption for Term Loans. Interest subsidy on term loan for 5 years @ 3% to 5%. For thrust sector industries, 25% capital subsidy would be provided limiting up to a maximum of USD 56,000 Land on 75% concessive rate for Mega Projects limited to USD 4.4 million. Entry tax exemption for 5 years. 5 years electricity duty exemption on captive power generation 15% capital subsidy to SSI up to USD 33,000 in backward areas Infrastructure grant up to USD 0.22 million crore for developing private sector industrial parks Partial reimbursement for Project report, ISO Certification, Patent and Technology Purchase cost

rationalization of taxes, facilities of mega projects and other related matters. Enacting an Industrial Facilitation Act and to change the rules of business with a view to make single window system decisive and result oriented. Developing infrastructure for supporting the identified industrial clusters Reviving closed down/ sick industrial units by granting special packages. Attractive incentive schemes.
Indore Pharmaceutical, Textile, Processing, IT, Auto Components

Food

SPECIALIZED INFRASTRUCTURE

CLUSTER APPROACH

Crystal IT Park Food Parks Stone Park Herbal Park Granite Park

Indore Mandsaur, Khargone, Chhindwara, Hoshagabad, Mandla and Bhind Katni Rewa Chhatarpur

Bhopal Engineering, Biotechnology, Herbal, IT, Food Processing Jabalpur Garment, Mineral, Forest & Herbal, Food Processing Gwalior Electronics, IT, FMCG, Engineering, Food Processing Rewa Refractories, Lime Stone, Forest Based Sagar Mineral Processing

Life Sciences Project

Apparel Park Gems & Jewellery Park

Bhopal
Indore (SEZ) Indore

Doing Business Made Easy Through MPAKVN

In a bid to build a competitive environment; industries and their ancillaries would be promoted in clusters based on the availability of raw materials, skilled labour and market potential. Under this Industrial Policy through Madhya Pradesh Audyogik Kendra Vikas Nigam Ltd (MPAKVNs) scheme, the State Government, has identified industrial clusters. Many of the industrial giants have their establishments in these areas, however 44% of

developed area is still untapped and open for investment.

Area Developed: 1,330 Hectares Area Developed: 2,262 Hectares Area Developed: 790 Hectares Area Developed: 273 Hectares Allotted: 115 Hectares

JABALPUR AKVN

GWALIOR AKVN

Allotted: 618 Hectares

Allotted: 800 Hectares Units established: 326 Major Groups: JK, Surya Roshini, Godrej, Grasim, Cadbury, Hotline, Crompton Greaves Special Infrastructure: ICD, Food Park

BHOPAL AKVN

Allotted: 125 Hectares Units established: 52 Major Groups: Raymond, Hindustan Petroleum, PBM, Ayur Special Infrastructure: Stone Park, Food Park

Units established: 286 Major Groups:HEG, Crompton Greaves, P&G, Godrej, Lupin, IFB, Oswal, Nahar Special Infrastructure: ICD, Food Park

REWA AKVN

Units established: 121 Major Groups: Birla, Jaypee Special Infrastructure: Integrated infrastructure development centres (IIDC)

Area Developed: 2,492 Hectares Allotted: 1431 Hectares

Malanpur, Malanpur Phase II, Banmore, Chainpura, Siddhgawan, Pratappura Rewa, Waidhan

INDORE AKVN

Units established: 575 Major Groups: Tata, Ranbaxy, Eicher, Bridgestone, Hindustan Motors, Kinetic, SRF, S Kumars, Gajra, Nicholas Piramal, Indorama, IPCA, Bhilwara Special Infrastructure: SEZ, Crystal IT Park, Food Park, Apparel Park
Pithampur, Kheda, Dewas, Maksi, Megh Nagar

Total developed area Total allotted area Total units established Growth centres

7,147 Hectares 3,089 Hectares 1,360

Mandideep, Pillukhedi, Mandideep Phase II Borgaon, Maneri, Purena

19

7
Source: MPSIDC

Mining & Minerals Industry in Madhya Pradesh

8

Sector Profile: Minerals

Mining: Mainstay of the Economy MP : Mineral Hub of India Location Analysis

Advantage MP
MP: An Investment Destination

Way Forward
Exploring the Opportunities: Project Profiles

Mining: Mainstay of the Indian Economy

India is endowed with significant mineral resources and produces 89 minerals classified as fuel mineral (4); metallic mineral (11); non-metallic mineral (52)and; minor minerals (22). Value of Mineral Performance in India

The mineral sector accounts for 11% of the Countrys industrial production.
The total value of mineral production (excluding atomic minerals) during 2005-06 is estimated at USD 16.7 billion, wherein fuel minerals contribute the largest share (USD 12.54 billion). During the year 2004-05, the provisional value of export of ores and minerals was approximately USD 15.41 billion, in which diamond (mostly cut) was the major export item accounting for 67.1% of the total exports, followed by iron ore (20.1%) and granite(3.7%). The key mineral producing states of the Country includes Madhya Pradesh, Chhattisgarh, Jharkhand, Andhra Pradesh, Maharashtra, Orissa, Rajasthan, Tamil Nadu etc. Various international mining companies such as BHP Minerals- Australia, Meridian Peak Resources- Canada, Metdist- UK, Phelps Dodge CorporationUSA and Rio Tinto- UK among others, have received licenses for mining in the Country.
India is the worlds largest producer of mica blocks and mica splittings; third largest producer of chromite; third in production of coal & lignite and barytes; fourth in iron ore; sixth in bauxite and manganese ore; tenth in aluminium and; eleventh in crude steel.
Source: Ministry of Mines, Govt of India

Value Contribution of Minerals in India

Source: Ministry of Mines, Govt of India

10

Mining: Mainstay of the Indian Economy

The public sector is a dominant player in the sector and contributes over 85% of the total value of mineral production. However, recently Indian non-coal mining sector has fully opened the doors for private investment (both domestic and foreign). The changes/ modifications in the Mineral Policy, have made India comparable to any liberal regime existing in other major

mineral producing countries in the world.

The mineral sector is highly fragmented where 95% of operating mines produce about 50% of the value of the minerals, thereby providing an opportunity of consolidation.. As a result of economy boom, resurging industrial production and rapid infrastructure development, the demand for minerals is growing fast in the Country. The emergence of a vibrant middle class has created demand for base metal products, in addition to the traditional demand for gold and silver. This has lead to the need of systematic search and evaluation of new deposits and intensive exploration of the same to boost the production of the reserves of minerals. In this regard, India is looking for state-of-the-art Status of Mineral Reserves in India

technological and management expertise, which can improve

productivity through good planning and design of mines,

reduction of costs, and optimisation of smelting and refining operations and by-product recoveries.

Source: Tata Energy Research Institute.

11

MP : Mineral Hub of India

Overview:
The State of MP has a rich and vast mineral deposits which includes diamond, slate, pyrophyllite, diaspore, coal, limestone, copper ore, manganese among others. Besides, the state also has favourable geological and geotectonic settings. The State ranks third in the Country in mineral production. Active mining of these minerals is generating revenue of more than USD 118.65 million per annum. MP is the sole producer of diamond in India. The State has 41.36% (largest) of the total national reserves of copper ore. It houses Indias largest opencast copper mine at Malanjkhand, district Balaghat.
Source: Directorate of Geology & Mining, MP

Reserves of Important Minerals of M.P. v/s India

It boasts of the thickest coal seam (135m) of Asia at Singrauli coalfield in Sidhi district. MP is the major producer of limestone and third largest cement producing State with a share of 14% of total cement production in the Country. It is also the major producer of Coal, Diaspore and Pyrophyllite, Manganese, Dolomite, Glass sand and Fire clay. The State is fast emerging as a dimensional stone producer Major reserves of Coal Bed Methane (CBM) have also been identified in the State.
Source: Directorate of Geology & Mining, MP

M.P.s Mineral-wise Revenue (2004-05)

12
Source: http://www.mp.nic.in/geologyandmining/

MP: Mineral Hub of India

Mineral Based Industries in The State
Mineral Reserves & Mineral Based Industries in M.P. The land parcels in the eastern, south-eastern and western belts of M.P. are the rich in various mineral reserves. Most of these minerals are supplied to other states in crude or semiprocessed forms for commercial use and further processing. Due to the large availability of minerals, several mineral-based industries have come up in and around these areas. Some of these industries are cement, thermal power, coal washeries etc. The mining industry along with the downstream/ allied industries have been the major source of employment in the State.
Mineral-based Industry Cement Thermal Power Hydrated Lime Slate Pencil No. of Units 7 10 25 155 Location Rewa, Satna, Damoh, Katni, Neemuch Shahdol , Umaria, Sidhi, Satna, Betul, Damoh, Katni, Rewa, Ujjain Katni & Satna Mandsaur

Roofing (Manglore)Tiles
Marble cutting& polishing Granite cutting& polishing

8
4 5

Hoshangabad, Balaghat
Katni Chhatarpur, Tikamgarh

Mineral based industries in the State has been a major driver in infrastructure development and employment in the related regions.

13

MP: Mineral Hub of India

Taking Mineral Industry a Step Further
The State has proposed to set-up Mineral-based industrial parks to give an impetus to the industry. The cluster approach adopted by the Government would support the core mineral industry as well as the allied/support industries such as jewellery making, crafting, cutting, polishing etc. The units/ companies in these parks would enjoy various fiscal and non-fiscal incentives that would be offered by the State Government. Further, these clusters/ parks would have two pronged benefits for the State Government and industries wherein it will be a source of generating employment in the State and would be a source of skilled manpower required for specific industries.

STONE PARK, KATNI

In order to harness the benefits of marble deposits in and around the Katni district, the State has come up with the Stone Park at Hardua. The Park is spread over an area of 120 acres and would house 40 units. It would focus on production, cutting, polishing, finishing and export of marbles. The location is in proximity to highway and railway station making it easy for transportation. M.P. Industries Development Corporation has been appointed as agency to development the infrastructure for Stone Park.

GEM & JEWELLERY PARK, INDORE

Gems and jewellery park is proposed to be set-up in Indore. The Park would focus on cutting, polishing, designing and marketing of precious stones and gold jewellery and export of the same. Land area of about 7 acres have been proposed for the Park, which could house about 200 units. The proposed site is very close to Indore airport (2.1 km) and railway station (15 km). M.P. Export Corporation Limited would promote the park, develop the scheme and provide management for setting up units in the Park.

The Government has also proposed: - Granite Park in Tikamgarh/ Sagar/ Chhatarpur and; - Diamond Park in Panna

14

Location Analysis
MP belt constitutes of the oldest group of rocks comprising of Archaeans and Proterozoic formation that constitutes nearly 45% area of the State. Further, other younger formations also have a significant

presence, thereby justifying the vast and varies mineral reserves.

In addition to this, M.P. is centrally located and well connected through road and rail to other states. This makes the transportation of crude minerals/ ores from M.P. to other states relatively easier. Further, M.P. has proximity to the major industrial states of the Country such as Maharashtra, Gujarat, Uttar Pradesh etc. The State is the major source of raw material for the sustenance of the industries in other states. It supplies bauxite, manganese, copper ore, marble etc. to various states of the Country, as shown in the figure. The vast unexploited mineral reserves in the State, offers a long term strategic opportunities to national and international mining
Diamond

Marble, Copper Ore (concentrated) Bauxite, Cement (Limestone)

companies.

Bauxite, Manganese Manganese, Cement (Limestone)

15

Advantage MP
MP Offers following Advantages to Mining/ Mineral Industry
Primary Advantage MP can cater to all the activities across the value chain
Indicative minerals Mineral Exploration Mining Mineral Beneficiation Undertaken at a very large scale Undertaken at a very large scale Finishing units in the State at local level Downstream industries Thermal power plants (captive & non-captive plants) Cement manufacturing & supplying units Big units for roofing, slate pencils, cladding & decorative things Cutting & polishing unit

Secondary Advantages
Vast mineral resources Cost Competitiveness Land prices are highly competitive as compared to other regions like Maharashtra, Andhra Pradesh, Gujarat etc. Labour cost is less as compared to other mineral intensive states. Cost of living in M.P. is much lower vis--vis other industrial states in the Country. Quality Human Resource Disciplined workforce and claims zero man days lost in past several years in the State. Large pool of skilled technical people along with the skilled labour force. Well Established Infrastructure High end technology used for mapping the mineral resources in the State and mining of the same. Good connectivity through road and rail to other states acts beneficial for transporting raw/crude minerals Well established industries such as thermal power, cement, refractories, cutting and polishing units in the State, reemphasises the advantage of its strong industry base and technical know-how.

Coal

Limeston e

Slate

Diamond

Unfinished diamonds are sold through auction Small cutting & polishing units Concentration of ore & supply to refineries in other States

Marble/ Granite

Cutting & polishing unit & export unit Refineries in the State and supply/ export extracts

Copper Ore

16

MP: An Investment Destination

What Makes it Further More Attractive is the willingness & support of the State Government to the industry and the increasing demand for minerals and mineral based products in MP and other neighboring states.
There is year round demand for cement, marble, granite in the neighbouring states such as Maharashtra, Uttar Pradesh etc, where the real estate and infrastructure industry is witnessing a boom. With vast presence of limestone, marble and other such minerals M.P. is considered as favourable destination for cement manufacturers and other mineral based units.

Demand drivers

Potential opportunities

The abundance of natural resources, large part of which still remains unexploited coupled with the growing economy and rising consumption levels, presents the huge potential for establishing large industrial bases.

Government support

The State Government is providing various incentives and concessions to the mining and mineral industry which are mentioned below:

Government Incentives & Initiatives

Priority status given to setting-up of industrial parks such as Granite Park, Gem & Jewellery Park and Stone Park. Mineral Concession on export quality deposits of Granite, Marble etc shall be granted on priority to entrepreneurs who are willing to establish 100% Export oriented units in the State. All those areas reserved for Public Sector Undertakings shall be dereserved for private entrepreneurs if mining has not commenced in such areas so far or if they have not secured Mineral Concessions and started mining. State Government has granted Reconnaissance Permits to various private entrepreneurs for searching diamond, base metals & other pollymetalic mineralisation Incentives given to Stone Park includes, rebate in premium for the allotment of land, facility of payment of premium in installments, Single Window system, permission to mortgage mining lease hold rights for obtaining the term loan, special cell of Directorate of Geology & Mining to provide guidance, marketing support to the Park. Exemption from electricity duty given for 5 years to industries for their captive power plants (thermal) for which the effective steps have been taken within a year and where the units commence their power generation within the 3 years.

17

MP: An Investment Destination

MP is the tested grounds for various mineral-based and allied industries.
There is active participation of both public sector as well as private sector in the mining and mineral industry. The major players in various mineral areas are given in the adjoining table. Several other players have also evinced their interests in the sector and major players that have recently allotted/ commenced their units are as follows.
Madhya Pradesh State Mining Corporation (MPSMC) has formed joint venture with Madhya Pradesh State Electricity Board (MPSEB) and Sainik Mining to use coal in Amelia district, Sidhi for thermal power generation in the State. MPSMC has formed joint venture with JP Associates for coal mining in Amelia North. JP Associates would use this coal for installing thermal power plant with power generation capacity of 500 MW. Hindalco and Essar Power would use the coal block in Mahan area for power generation capacity of 650 MW and 1000 MW respectively. Further in Cement sector also companies such as SAIL in joint venture with JP Associates, Rewati Cement etc are also coming up with their cement manufacturing plants.
Marble Diamond Flagstone Manganese Cement (Limestone) Copper Coal Minerals Governme nt/ PSU Private Companies/ Organisations

B.L.A Industries (Coal washery) Subsidiary company of Coal India ltd viz, South Eastern Coal Field Ltd, Northern Coal Field Ltd, Western Coal Field Ltd.
Hindustan Copper Ltd ( Govt of India Public Sector) ACC Ltd Satna Cement Birla Vikas Maihar Cement Prism Cement Diamond Cement JP Cement Bela cement Vikram Cement National Mineral Development Corporation

Several small entrepreneurs Manganese Ore India Ltd RK marble Ojashwi Marble Madhya Pradesh State Mining Corporation (Govt of MP undertaking)

MP offers you vast natural resources, along with the necessary infrastructure and skilled human resource. The successful presence of major international and national players along with the supportive Government, provides you ample opportunities in the mineral industry in the State.

Rock Phosphate, Pyrophyllite, Diaspore, Granite, Bauxite

18

The Way Forward

There are various reserves and related industries in the mining and mineral sector where lies large investment opportunities. Following are some of the identified reserves and the potential opportunities are given below.

Opportunities in Mining Industry

Mineral reserves identified for private investors Technology partner with the Government for mining

Opportunities in Mineral-based Industry

Mineral (Industry)
Limestone (Cement plants)

Reserves Available
Limestone reserve at: Damonh-Panna region (~8 million tons) Bela-Pagra of Rewa region (~ 20 million tons) Raghurajnagar and Nagod Tehsil in Satna Four blocks of coal deposits in Chindwara district are brought into captive list 217 hector area of flag stone deposit of international standard is present in Shivpuri district Deposits of marble available in Mundwara and Bahoriband Tehsil in Katni. Good quality marble of various colours are expected in these regions. Vast deposits in Chhattarpur region Second major producer in India. Reserves in Jhabua and Chhattarpur district

Coal (Captive power plants) Flag Stone (cutting, polishing & finishing units) Marble (cutting, polishing & finishing units) Granite (cutting, polishing units) Rock Phosphate (Fertilizer plant)

19

Connecting Further

Directorate of Geology & Mining, Govt. of MP

Madhya Pradesh State Industrial Development Corporation Government of Madhya Pradesh Madhya Pradesh State Mining Corporation Madhya Pradesh Industries Development Corporation

http:// www. mp.nic.in/geologyandmining/ http://www.mpsidc.com http://www.mpgovt.nic.in

20