Summary of part-1

The GCSR (Global Country Study Report) is an essential part to MBA sem-3.
In this project we have to study global country industry and we have to
analyze bilateral trade opportunity between India and any other particular
country, and also we have to find trade opportunity Gujarat and Nagaland.
Here we are studying mining industry in Canada and Mining industry of India.

Mining industry in India

The Mining industry in India is a major economic activity which

contributes significantly to the economy of India.

The GDP contribution of the mining industry varies from 2.2% to 2.5%
only but going by the GDP of the total industrial sector it contributes
around 10% to 11%. Even mining done on small scale contributes 6% to
the entire cost of mineral production.

Indian mining industry provides job opportunities to around 700,000

individuals.

India is the largest producer of sheet mica, the third largest producer of
iron and the fifth largest producer of bauxite in the world. India's
metal and mining industry was estimated to be $106.4bn (£68.5bn) in 2010.

Produced in India

Minerals Quantity Unit Mineral Type

Coal 403 Million Tonnes Fuel
Lignite 29 Million Tonnes Fuel
Natural gas 31007 Million Cubic Fuel
Tonnes
Crude 32 Million Tonnes Fuel
Petroleum
Bauxite 11278 Thousand Tonnes Metallic Mineral
 Copper 125 Thousand Tonnes Metallic Mineral
Gold 3048 Thousand Metallic Mineral
Grammes
Iron Ore 140131 Thousand Tonnes Metallic Mineral
Manganese Ore 1963 Thousand Tonnes Metallic Mineral
Zinc 862 Thousand Tonnes Metallic Mineral
Diamond 60155 Carats Non Metallic
Mineral

Mining industry in Canada

 Mining is one of Canada’s primary industries and involves the

extraction, refining, and/or processing of economically valuable rocks and
minerals. Mineral products – including gold, silver, iron, copper,
zinc, nickel – are critical to modern industrial society.

 Canada ranks first in the world for the production of potash and
uranium and among the top five for the production of nickel and
diamonds.

 The mining industry is now a major player in Canada's economy,

contributing nearly 5% of the country's Gross Domestic Product.

 Canada's mining companies share a strong commitment to environmental

and social responsibility. Canada is a world leader in the use of
advanced mining technology and sustainable environmental
practices designed to minimize the impacts of mining exploration and
development on the natural environment and the communities in which
they are located.

Facts and Figure for Mining in Canada

 Production of the Canadian mining , mineral- processing , and metal

producing industries total approximately $42 billion per year
  Canada is one of the largest mining nations in the world, producing
more than 60minerals and metals
 More than 115 communities across Canada depend on the
minerals industry
 Over the past five years, the minerals and metals sector contribution
to Canadian Gross domestic Product (GDP) has averaged nearly 5%
 Canada is the world's third-largest producer of diamonds,
accounting for 10% of the world's supply by weight and 14% of the
global market by value.
 Mining product shipments represent approximately 55% of Canada's
rail freight revenues and 60 to 75% of Canadian port tonnage
 The Canadian mining industry contributes more than $8 billion a year
in taxes to federal and provincial/territorial governments

Mining in Gujarat

Gujarat Mineral Development Corporation Limited (GMDC) is a major

minerals and lignite mining company of India. It is State owned company
owned by Government of Gujarat.

In Gujarat product range includes essential energy minerals like lignite, base
metals and industrial minerals like bauxite and fluorspar.

The mining activities are carried out by GMDC in Gujarat. They conduct or
organize many events or programs for the help of employees, society etc.
some of the social factors like income distribution, labour mobility, life style,
education facility, living condition and many more influence the operations
of the industry/ company.

The Company as a role model employer lays great stress on the welfare of its
employees, their families and its vicinity habitats. The Company provides
following comfort level facilities to its employees:

 Housing quarters at 7 projects and HRA at other Projects

  Hospital at Panandhro and Medical facilities at projects with free
ambulance facility
 Free Medical treatment at Govt. / CGHS recognized Private hospital
empanelled by GMDC/ Trust hospitals as notified by
 Education to children of the employees free at three project through
own Schools
 Free School transportation to employee’s children
 Recreation club & Gym
 Library
 Free Uniform and shoes
 Free safety Shoes
 Free transport at Projects
 Sports with infrastructural facilities
 Reimbursement of Dish/ Cable connection expenses
 Clean and green environment
 By adopting the new technology, industry can increasing its production
as well as can decrease the cost factor.
 A good technical infrastructure would lead to better production,
procurement and distribution logistics, resulting in reduced wastage
and lower costs.
 Sound technology may be a decisive factor for food technology
innovation, better presentation, more effective business marketing,
etc.

Indian mining industries is an important contributor to the GDP accounting

for about 2-3%. Of more than 85 different types of minerals produced India
ranks 1st in the production of mica blocks and splitting, 3rd in the production
of coal & lignite, 4th in iron ore, 6th in bauxite and manganese ore, 10th in
aluminum and 11th in crude steel Gujarat Government has proactively
focused on value addition in sustainable mining and mineral processing
industries. Owing to an increasing call for infrastructure development,
coupled with the growth in economy and construction activity, the demand
of minerals is on the rise. With a strong augmentation witnessed in mining
activities, there is a paradigm shift towards development of sustainable
mining cities, with a focus towards the following:
•Setting up co enablers for mining infrastructure, human capital and
technology
•Ensuring sustainable mining and development

Mining in Nagaland:

The search for mineral deposit in the State of Nagaland had a very late start.
Although the western part of the State was partly explored in early twentieth
century mainly in connection with the search of ‘energy group’ of minerals,
its middle and eastern parts remained completely unexplored till the
inception of the State Directorate of Geology and Mining in late 1968.

Minerals so far discovered by the Department include petroleum and natural

gas (proved by ONGC), nickel-cobalt-chromium bearing magnetite,
limestone, marble, coal, clay, slate, dimensional and decorative stones. In
addition to mineral investigation, the department also actively engages
investigation for the development of Ground Water resources both in the
plain as well as in the hilly terrain.

NAGALAND has a number of important mineral resources but the state does
not ‘seem too much concerned’ about their valuable holdings, according to a
central regulatory body during a recent review. Unorganized and haphazard
mining activities are causing environmental degradation while ‘huge quantity
of coal’ exploited every year is not being reflected in the yearly resource
national data on coal, the Central Geological Programming Board has said.
The board stated in its meeting summary that Nagaland does not ‘seem’
concerned about the environmental degradation that unorganized and
haphazard mineral exploitation in the state are causing. Assam, Meghalaya
and Nagaland are the three states that have ‘issues’ in this regard, according
to the board.
The Central Geological Programming Board converged for its 52nd meeting
on the 14th in New Delhi where officials from the north eastern states’
geology and mineral departments attended. The objective of the meeting
was to discuss and finalize the Field Season Program of the Geological
Survey of India (GSI) for the Field Season 2013-2014.

Business plan

Introduction of GMDC:

Gujarat Mineral Development Corporation Limited

Industry Mining
Founded 1963
Headquarters Ahmedabad, Gujarat, India
Area served Gujarat
Slogan "Fueling The Growth"
Website www.gmdcltd.com
Managing Director Shri B.B. swain
USP Product range includes essential energy minerals like
lignite, base metals and industrial minerals like
bauxite and fluorspar.
Gujarat Mineral Development Corporation Limited (GMDC) is a major
minerals and lignite mining company of India. It is State owned company
owned by Government of Gujarat. GMDC was founded in 1963. Its corporate
headquarters is at Ahmedabad. It develop major mineral resources in the
state and commenced with a small silica sand quarrying plant near
Thangadh to crush and screen the silica required for glass manufacturing.

Its product range includes essential energy minerals like lignite, base metals
and industrial minerals like bauxite and flourspar. Gujrat government as
given its green signal to GMDC to form a joint venture with NALCO for a 1
mtpa refinery.

GMDC also owns and runs Akrimota Thermal Power Station a 250 MW (2x125
MW) lignite based thermal power plant located in village Nanichher in
Lakhpat Taluka, Kutch District.

Product Range:

GMDC has grown in strength since its inception over the years. In 1963 the
company commenced its operation with small silica sand quarry. In 1964 it
started with bauxite mines in Kutch and now operates six bauxite mines. In
1971, a beneficiation plant was commissioned by GMDC to process 500 M.T
of fluorspar ore and to produce calcium fluoride used for the manufacture of
Hydro-fluoric acid and as flux in metallurgical industries. A captive mine at
Ambadungar was established also to feed the plant. In 1976 lignite was
discovered in Gujarat and GMDC started its first lignite mines at Panadhro. In
1980, a captive refining plant with copper mines was set up by GMDC near
Ambaji. In 1983, another lignite mine was discovered & started by it at
Rajpardi near Bharuch. In 1992, it established a calcination plant to add
value to the bauxite mined by it at Gadhsisha in Kutch. In 1996, to use the
lignite mined by it, GMDC also started thermal power plant at Nani-Chher in
Kutch. In 2005 & 2009 more lignite mines were started by GMDC at
Tadkeshwar near Surat and near Bhavnagar, respectively. Also in 2006 it
developed manganese ore mines at Shivarajpur in Panchmahals. It is also
setting up an Alumina plant with Raytheon Corporation of USA.

Public Listing:

In 1999, the government of Gujarat being the sole owner, divested 26% of its stake
and the GMDC became a listed entity (BSE&NSE) and is occupying a position within
the top fortune 500 companies in our country with an annual turnover surpassing
10 billion with considerable annual growth rate.

Competitors:

1.National Aluminium Company Limited (eliminated by JV)

2.AshapuraMinechem Ltd.

3.Sterlite Industries (India) Ltd

SWOT analysis of GMDC

Strength:

1. Strong assets – Owns bauxite, manganese, lignite and fluorspar mines in Kutch, Gujarat

2. Strong financial position

3. Nationalized – Thus enjoys customer confidence

4. Strong negotiating power – as resources owned and minerals produced are key to other
secondary industries

5. Expertise in sustainable mining

Weakness:

1. Limited operations in Gujarat only

2. Locational disadvantage – iron and steel plants located in Jharkhand

Opportunity:

1. Investment in mechanization and improvement in technology

2. Diversification in other minerals

3. Joint venture to expand business

Threats:

1. Regulatory pressures on business

2. Presence of private players

Selected product: lignite

b. brief about lignite:
Lignite is termed as the “Brown Gold” all over the world. Lignite, often
referred to as brown coal, is a soft brown combustible sedimentary rock.
Lignite is brownish-black in color and has a carbon content of around 25-
35%, a high inherent moisture content sometimes as high as 66%, and
an ash content ranging from 6% to 19% compared with 6% to 12%
for bituminous coal
It is mined in the following countries:

 China
 Bulgaria
 Greece
 Germany
 Kosovo
 Poland
 Serbia
 Russia
 Turkey
 United States
   Canada
   India

Because of its low energy density and typically high moisture content, brown
coal is inefficient to transport and is not traded extensively on the world
market compared with higher coal grades. It is often burned in power
stations near the mines. Gujarat Mineral Development Corporation (GMDC) is
among the most profitable entities of the Gujarat government. A mining and
mineral processing company, GMDC is the largest merchant seller of,
lignite in India. It is also a major producer of bauxite, calcined bauxite,
fluorspar and manganese ore. Besides, it is engaged in power generation,
from conventional and non-conventional sources.

GMDC is associated with the various projects of lignite all over Gujarat. Its
main projects are located in the following areas.

Tadkeshwar
Rajpardhi
Panandhro
Mata no Madh
Bhavnagar

Detail study of lignite projects of GMDC in Gujarat.

Particulars Tadkeshwar Rajpardhi Panandhro

Name of the Tadkeshwar Lignite Amod G-19 Panandhro Lignite
mine Mine Extension Lignite Mine
Mine
location Tadkheshwar,Surat,G Amod,Bharuch Panandhro, kutch,
ujarat Gujarat. Gujarat.
Commencem Year 2005-06 2007-2008 1973-74
ent period
Geological 48.92 million tonnes 18.08 million 112 million tonnes
reserves tonnes
Mineable 33.90 million tonnes 12.50 million 109 million tonnes
reserves tonnes
Exploration GMDC Geological Survey Geological Survey
agency Commissionarate of of India of India
Geology and Mining Commissionarate Commissionarate
of Geology and of Geology and
Mining Mining
Gujarat Mineral
Development
Corporation
Total 6.82 km2 1.97km2
exploration
area
Valuable  Dhrangadhra  J.K.Paper Ltd
customer Chemicals Works  Rupali Dyeing
Ltd. & Printing Mills
 Adani Wilmar  Rita Dyeing &
Limited Printing Mills
 Indian Rayon Pvt. Ltd
 Mafatlal  Maize
Industries Ltd. Products
 Nirma Limited  Omkar Textile
 Nikisu Fab Pvt. Mills Ltd.
Ltd  Omkar Textile
 Atul Ltd. Mills Pvt. Ltd.
(Colour Divn.)  CIL-Nova
 H.K.Finechem PetroChemical
Limited Limited
 Jay Bharat Dyg  Ruby Macons
& Ptg Pvt. Ltd. Limited (Morai
 Aquagel Unit CPP)
Chemical Pvt.  Nirma
 Ltd. Limited
 Atul Ltd.,
(Colour Divn.)

use Lignite is directly Lignite is directly

used in Thermal used in Thermal
Power Plants, Textile Power Plants,
Industries, Paint Textile Industries,
Industries, Soda Ash Paint Industries,
industries, Roof and Soda Ash
Tiles Industries, etc. industries, Roof
and Tiles
Industries, etc.

Market analysis & Marketing plan

Major mining companies in Gujarat and its market share

1. National Aluminium Company Limited (eliminated by JV)

 National Aluminium Company Limited (NALCO) is a Navratna
CPSE under Ministry of Mines, Govt. of India. It was established
on 7th January, 1981, with its registered office at Bhubaneswar.
The Company is a group ‘A’ CPSE having integrated and
diversified operations in mining, metal and power with sales
turnover of Rs 7024 crore in financial year 2013-14. Presently,
Government of India holds 80.93% equity of NALCO.

2. AshapuraMinechem Ltd.

Ashapura Group is India’s largest muti-mineral solutions provider.

The flagship company Ashapura Minechem Ltd. is listed on
India’s premier exchanges. The group has mining & mineral
processing facilities in Rajasthan, Gujarat, Maharashtra,
Karnataka, Kerala, Andhra Pradesh and Orissa. Today Ashapura
Group has attained global status with projects in Belgium, Oman
and Malaysia.

3. Sterlite Industries (India) Ltd.

On 31 March 2013, the company's market capitalization was INR

31,490 crores (US$ 5.79 billion).

STP Analysis of GMDC:

Segment- Industrial Segmentation

Target Group- Iron and Steel plants and Aluminum manufacturing plants

Positioning- Unlocks mineral wealth for value addition

Marketing Mix of GMDC:

Product:

GMDC has following products:

1. Lignite

Lignite - popularly termed as 'Brown Gold' all over the world. Gujarat is rich in high grade
Lignite. To explore this GMDC brought in one of the world's best known mining technology
in this field - TAKRAF of Germany.

This has made GMDC a largest merchant seller of lignite in the Country. GMDC's operations
have expanded geographically to other Indian States. Profile for Lignite Projects

 Tadkeshwar

 Rajpardi

 Panandhro

 Mata No Madh

 Bhavnagar

2. Flourspar

3. Managanese

4. Silica sand

5. Limestone

6. Bentonite

7. Ball Clay

State wise Production of lignite

State 2009-10
Gujarat 39.90 billion tonnes.
Rajasthan 29.36 billion tonnes
Tamilnadu 38.93 billion tones