Coal news and updates

India tough market for makers of heavy mining gear

November 27: India is not an easy market for overseas heavy and large mining equipment makers, an official from JoyGlobal informed ICMW.

India is a price-sensitive zone and it is overall difficult to sell to the government sector, said the official, stressing that procurement, especially in the PSU segment, is through public tendering where, “in most cases, technology takes a backseat when such decisions are taken, at the cost of size and capacity”.

On the other hand, the official continued, the kinds of high-value equipment that most global biggies manufacture are just not affordable to the private sector unless the company is a very large player with huge funding capabilities.

Another key problem in India lies in the fact that, for introduction of new equipment/technology to the public sector, manufacturers generally get to supply only through trial orders. Furthermore, it takes a lot of time in the finalisation of such orders.

In terms of equipment too, in India, coal mining companies have not been able to go much beyond the 10 cubic meter range of shovels primarily. “We do see a gap between the kind of machines JoyGlobal manufactures and the actual ones in use in India. This is a huge difference between the global and Indian scenarios,” observed the official.

Thus, most global manufacturers are pinning hopes on the new Modi government’s policies in the coal sector that could allow global coal mining giants to enter the fray in India. “The MNC players will be more attuned to our products since we play in the premium space,” remarked the official.

Another reason why the higher capacity machines are not required in India is the size of the mines – they are much smaller, in the range of 3-5 mt of production per annum. Globally, a single mine can yield 30-50 mt!

“In fact, most of the blocks recently de-allocated were also small in size,” reminded the official, adding: “But, if the country has to increase coal production then we must do larger-sized mining. And that is what mining equipment manufacturers are pinning their hopes on in India.”