NAME OF SUBJECT:

BUSINESS ENVIRONMENT
STUDENTS NAME: JASPREET KAUR

ROLL NO: 09056 CORE MBA- 1ST YEAR

What ! "#! $%!! %$& '($)%$t*

Business may be understood as the organized efforts of enterprises to supply onsumers !ith goods and ser"i es to earn profit# Business en"ironment onsist of all those fa tors that ha"e bearing on the business su h as strengths$ !ea%ness$ internal po!er relation ship and orientations of the organization$ go"ernment poli ies and regulations$ nature of the e onomy and e onomi onditions$ so io& ultural fa tors$ demo graphi trends$ natural fa tors$ global trends et #

Nat#'% (+ "#! $%!!

The purpose of business goes beyond earning profit# It is an important institution in so iety# Be it for the supply of goods and ser"i es# 'reation of the (ob opportunities# Offer of better )uality of life# 'ontribution to the e onomi gro!th of ountry and putting it on the global map#

S,(-% (+ "#! $%!!

The s ope of business is "ery !ide# It o"ers a ti"ities related to produ tion$ distribution of goods and ser"i es !ith an aim to earn profit# The business a ti"ities are usually di"ided into t!o parts* +# Industry# ,# 'ommer e#

O".%,t &%! (+ B#! $%!!

-rofit# .ro!th# -o!er# /oy of reation# Ser"i e to so iety# Mar%et 0eadership# 'hallenging# .ood orporate itizenship#

PEST a$a/0! !

PEST a$a/0! ! stands for 1Politi al$ E onomi $ So ial$ and Te hnologi al analysis1 and des ribes a frame!or% of ma ro&en"ironmental fa tors used in the en"ironmental s anning omponent of strategi management# It is a part of the e2ternal analysis !hen ondu ting a strategi analysis or doing mar%et resear h and gi"es a ertain o"er"ie! of the different ma ro en"ironmental fa tors that the ompany has to ta%e into onsideration# It is a useful strategi tool for understanding mar%et gro!th or de line$ business position$ potential and dire tion for operations# The gro!ing importan e of en"ironmental or e ologi al fa tors in the first de ade of the ,+st entury ha"e gi"en rise to green business and en ouraged !idespread use of an updated "ersion of the -EST frame!or%#

Th% M(1%/2! Fa,t('!

P(/ t ,a/ fa tors$ or ho! and to !hat degree a go"ernment inter"enes in the e onomy# Spe ifi ally$ politi al fa tors in lude areas su h as ta2 poli y$ labour la!$ en"ironmental la!$ trade restri tions$ tariffs$ and politi al stability# -oliti al fa tors may also in lude goods and ser"i es !hi h the go"ernment !ants to pro"ide or be pro"ided 3merit goods4 and those that the go"ernment does not !ant to be pro"ided# 5urthermore$ go"ernments ha"e great influen e on the health$ edu ation$ and infrastru ture of a nation# E,($() , fa tors in lude e onomi gro!th$ interest rates$ e2 hange rates and the inflation rate# These fa tors ha"e ma(or impa ts on ho! businesses operate and ma%e de isions# 5or e2ample$ interest rates affe t a firm6s ost of apital and therefore to !hat e2tent a business gro!s and e2pands# E2 hange rates affe t the osts of e2porting goods and the supply and pri e of imported goods in an e onomy S(, a/ fa tors in lude the ultural aspe ts and in lude health ons iousness$ population gro!th rate$ age distribution$ areer attitudes and emphasis on safety# Trends in so ial fa tors affe t the demand for a ompany6s produ ts and ho! that ompany operates# 5or e2ample$ an ageing population may imply a smaller and less&!illing !or%for e 3thus in reasing the ost of labor4# 5urthermore$ ompanies may hange "arious management strategies to adapt to these so ial trends 3su h as re ruiting older !or%ers4# T%,h$(/(3 ,a/ fa tors in lude e ologi al and en"ironmental aspe ts$ su h as R78 a ti"ity$ automation$ te hnology in enti"es and the rate of te hnologi al hange# They an determine barriers to entry$ minimum effi ient produ tion le"el and influen e outsour ing de isions# 5urthermore$ te hnologi al shifts an affe t osts$ )uality$ and lead to inno"ation# E$& '($)%$ta/ fa tors in lude !eather$ limate$ and limate hange$ !hi h may espe ially affe t industries su h as tourism$ farming$ and insuran e# 5urthermore$ gro!ing a!areness to limate hange is affe ting ho! ompanies operate and the

produ ts they offer&&it is both reating ne! mar%ets and diminishing or destroying e2isting ones#

SWOT a$a/0! !
SWOT A$a/0! ! is a strategi planning method used to e"aluate the Strengths$ Wea%nesses$ Opportunities$ and Threats in"ol"ed in a pro(e t or in a business "enture# It in"ol"es spe ifying the ob(e ti"e of the business "enture or pro(e t and identifying the internal and e2ternal fa tors that are fa"orable and unfa"orable to a hie"ing that ob(e ti"e# The te hni)ue is redited to 9lbert :umphrey$ !ho led a on"ention at Stanford Uni"ersity in the +;<=s and +;>=s using data from 5ortune ?== ompanies#

St'at%3 , a$1 C'%at &% U!% (+ SWOT A$a/0! !

S@OT analysis must first start !ith defining a desired end state or ob(e ti"e# 9 S@OT analysis may be in orporated into the strategi planning model# 9n e2ample of a strategi planning te hni)ue that in orporates an ob(e ti"e&dri"en S@OT analysis is Strategi 'reati"e 9nalysis 3S'9N4# Strategi -lanning$ in luding S@OT and S'9N analysis$ has been the sub(e t of mu h resear h# Strengths* attributes of the person or ompany that is helpful to a hie"ing the ob(e ti"e# Wea%nesses* attributes of the person or ompany that is harmful to a hie"ing the ob(e ti"e# Opportunities* external onditions that is helpful to a hie"ing the ob(e ti"e# Threats* external onditions !hi h ould do damage to the ob(e ti"e# Identifi ation of S@OTAs is essential be ause subse)uent steps in the pro ess of planning for a hie"ement of the sele ted ob(e ti"e may be deri"ed from the S@OTAs#

4$t%'$a/ a$1 %5t%'$a/ +a,t('!

The aim of any S@OT analysis is to identify the %ey internal and e2ternal fa tors that are important to a hie"ing the ob(e ti"e# These ome from !ithin the ompany6s uni)ue "alue hain# S@OT analysis groups %ey pie es of information into t!o main ategories*

Internal fa tors B The strengths and weaknesses internal to the organization# E2ternal fa tors B The opportunities and threats presented by the e2ternal en"ironment to the organization# & Use a -EST or -EST0E analysis to help identify fa tors

The internal fa tors may be "ie!ed as strengths or !ea%nesses depending upon their impa t on the organization6s ob(e ti"es# @hat may represent strengths !ith respe t to one ob(e ti"e may be !ea%nesses for another ob(e ti"e# The fa tors may in lude all of the

C-6sD as !ell as personnel$ finan e$ manufa turing apabilities$ and so on# The e2ternal fa tors may in lude ma roe onomi matters$ te hnologi al hange$ legislation$ and so io& ultural hanges$ as !ell as hanges in the mar%etpla e or ompetiti"e position# The results are often presented in the form of a matri2# S@OT analysis is (ust one method of ategorization and has its o!n !ea%nesses# 5or e2ample$ it may tend to persuade ompanies to ompile lists rather than thin% about !hat is a tually important in a hie"ing ob(e ti"es# It also presents the resulting lists un riti ally and !ithout lear prioritization so that$ for e2ample$ !ea% opportunities may appear to balan e strong threats# It is prudent not to eliminate too )ui %ly any andidate S@OT entry# The importan e of indi"idual S@OTs !ill be re"ealed by the "alue of the strategies it generates# 9 S@OT item that produ es "aluable strategies is important# 9 S@OT item that generates no strategies is not important#

U!% (+ SWOT A$a/0! !

The usefulness of S@OT analysis is not limited to profit&see%ing organizations# S@OT analysis may be used in any de ision&ma%ing situation !hen a desired end&state 3ob(e ti"e4 has been defined# E2amples in lude* non&profit organizations$ go"ernmental units$ and indi"iduals# S@OT analysis may also be used in pre& risis planning and pre"enti"e risis management# S@OT analysis may also be used in reating a re ommendation during a "iability study#

St'%$3th!

W%a6$%!!%!

O--('t#$ t %!

Th'%at!

Reputation in mar%etpla e

Shortage of @ell established 0arge onsultan ies onsultants at position !ith a !ell operating at a minor operating le"el rather defined mar%et ni he# le"el than partner le"el

E2pertise at partner le"el in :RM onsultan y

Unable to deal !ith Identified mar%et for Other small multi&dis iplinary onsultan y in areas onsultan ies loo%ing assignments be ause other than :RM to in"ade the of size or la % of mar%etpla e ability

Tra % re ord B

su essful assignments

B#! $%!! E$& '($)%$t

To fun tion effe ti"ely and effi iently$ ompanies operating internationally must understand the so ial en"ironment of the host ountries they are operating in# Today there are thousands of MN's !hi h operate in many parts of the globe# Su h ompanies should familiarize themsel"es !ith the languages$ ultures and the business en"ironments of the ountries in !hi h they are operating# The global business environment an be defined as the en"ironment in different so"ereign ountries$ !ith fa tors e2ogenous to the home en"ironment of the organization$ influen ing de ision ma%ing on resour e use and apabilities# This in ludes the so ial$ politi al$ e onomi $ regulatory$ ta2$ ultural$ legal$ and te hnologi al en"ironments# The politi al en"ironment in a ountry influen es the legislations and go"ernment rules and regulations under !hi h a foreign firm operates# The e onomi en"ironment relates to all the fa tors that ontribute to a ountry6s attra ti"eness for foreign businesses# E"ery ountry in the !orld follo!s its o!n system of la!# 9 foreign ompany operating in that parti ular ountry has to abide !ith its system of la! as long as it is operating in that ountry# The te hnologi al en"ironment omprises fa tors related to the materials and ma hines used in manufa turing goods and ser"i es# Re epti"ity of organizations to ne! te hnology and adoption of ne! te hnology by onsumers influen e de isions made

in an organization# 9s firms ha"e no ontrol o"er the e2ternal en"ironment$ their su ess depends upon ho! !ell they adapt to the e2ternal en"ironment# 9 firm6s ability to design and ad(ust its internal "ariables to ta%e ad"antage of opportunities offered by the e2ternal en"ironment$ and its ability to ontrol threats posed by the same en"ironment$ determine its su ess# This boo% des ribes the e2ternal en"ironment in !hi h today6s multinationals orporations ondu t their business The I'59I enter for management resear h state that the global business environment an be defined as the en"ironment in different so"ereign ountries$ !ith fa tors e2ogenous to the home en"ironment of the organization$ influen ing de ision ma%ing on resour e use and apabilities# This in ludes the so ial$ politi al$ e onomi $ regulatory$ ta2$ ultural$ legal$ and te hnologi al en"ironments# The politi al en"ironment in a ountry influen es the legislations and go"ernment rules and regulations under !hi h a foreign firm operates# The e onomi en"ironment relates to all the fa tors that ontribute to a ountry6s attra ti"eness for foreign businesses# E"ery ountry in the !orld follo!s its o!n system of la!# 9 foreign ompany operating in that parti ular ountry has to abide !ith its system of la! as long as it is operating in that ountry# The te hnologi al en"ironment omprises fa tors related to the materials and ma hines used in manufa turing goods and ser"i es# Re epti"ity of organizations to ne! te hnology and adoption of ne! te hnology by onsumers influen e de isions made in an organization# 9s firms ha"e no ontrol o"er the e2ternal en"ironment$ their su ess depends upon ho! !ell they adapt to the e2ternal en"ironment# 9 firm6s ability to design and ad(ust its internal "ariables to ta%e ad"antage of opportunities offered by the e2ternal en"ironment$ and its ability to ontrol threats posed by the same en"ironment$ determine its su ess#

Example of an Indian Industry C(a/ ) $ $3

C(a/ ) $ $3 is the e2tra tion or remo"al of oal from the earth by mining# @hen oal is used for fuel in po!er generation it is referred to as steaming or thermal oal# 'oal that is used to reate o%e for steel manufa turing is referred to as o%ing or metallurgi al oal# 'oal is also an important sour e of Methanol !hi h resides in binding resin$ ply!ood$ and a eti a id$ plasti bottles# 'oal is the means of produ ing more than half of the United States of 9meri a6s ele tri ity## In the United States$ United Eingdom$ and South 9fri a$ a oal mine and its a ompanying stru tures are olle ti"ely %no!n as a olliery#

U!a3% a$1 Ma'6%t!

In general oal is sought for its arbon&based energy ontent# It is used mainly for ele tri ity generation# The steel and ement industries use oal for e2tra tion of iron from iron ore and for ement produ tion#

M%th(1! (+ %5t'a,t ($
The most e onomi al method of oal e2tra tion from oal seams depends on the depth and )uality of the seams$ and also the geology and en"ironmental fa tors of the area being mined# 'oal mining pro esses are generally differentiated by !hether they operate on the surfa e or underground# Many oals e2tra ted from both surfa e and underground mines re)uire !ashing in a oal preparation plant# 'oal is mined only !here mining is te hni ally feasible and e onomi ally (ustifiable# Te hni al and e onomi feasibility are e"aluated on se"eral fa tors* regional geologi onditionsD o"erburden hara teristi sD oal seam ontinuity$ thi %ness$ stru ture$ )uality$ and depthD strength of materials abo"e and belo! the seam for roof and floor onditionsD topography 3espe ially altitude and slope4D limateD land o!nership as it affe ts the

a"ailability of land for mining and a essD surfa e drainage patternsD ground !ater onditionsD a"ailability of labor and materialsD oal pur haser re)uirements in terms of tonnage$ )uality$ and destinationD and apital in"estment re)uirements# Surfa e mining and deep underground mining are the t!o basi methods of mining# The hoi e of mining method depends primarily on depth of burial and thi %ness of the oal seam# Seams relati"ely lose to the surfa e$ at depths less than appro2imately +F= feet 3?? m4$ are usually surfa e mined# 'oals that o ur at depths of +F= to G== feet 3;+ m4 are usually deep mined but$ in some ases$ surfa e mining te hni)ues an be used#

U$1%'3'(#$1 ) $ $3
Most oal seams are too deep underground for open ast mining and re)uire underground mining$ !hi h method urrently a ounts for about <=H of !orld oal produ tion# In deep mining$ the room and pillar or bord and pillar method progresses along the seam$ !hile pillars and timber are left standing to support the mine roof# On e room and pillar mines ha"e been de"eloped to a stopping point 3limited by geology$ "entilation$ or e onomi s4$ a supplementary "ersion of room and pillar mining$ termed se ond mining or retreat mining$ is ommonly started# Miners remo"e the oal in the pillars$ thereby re o"ering as mu h oal from the oal seam as possible# 9 !or% area in"ol"ed in pillar e2tra tion is alled a pillar se tion# Modern pillar se tions use remote& ontrolled e)uipment$ in luding large hydrauli mobile roof&supports$ !hi h an pre"ent a"e&ins until the miners and their e)uipment ha"e left a !or% area# The mobile roof supports are similar to a large dining&room table$ but !ith hydrauli (a %s for legs# 9fter the large pillars of oal ha"e been mined a!ay$ the mobile roof support6s legs shorten and it is !ithdra!n to a safe area# The mine roof typi ally ollapses on e the mobile roof supports lea"e an area# There are fi"e prin ipal methods of underground mining*

0ong !all mining a ounts for about ?=H of underground produ tion# The long!all shearer has a fa e of +$=== feet 3G== m4 or more# It is a sophisti ated ma hine !ith a rotating drum that mo"es me hani ally ba % and forth a ross a !ide oal seam# The loosened oal falls on to a pan line that ta%es the oal to the on"eyor belt for remo"al from the !or% area# 0ong!all systems ha"e their o!n hydrauli roof supports !hi h ad"an e !ith the ma hine as mining progresses# 9s the long!all mining e)uipment mo"es for!ard$ o"erlying ro % that is no longer supported by oal is allo!ed to fall behind the operation in a ontrolled manner# The supports ma%e possible high le"els of produ tion and safety# Sensors dete t ho! mu h oal remains in the seam !hile roboti ontrols enhan e effi ien y# 0ong!all systems allo! a <=&to&+==H oal re o"ery rate !hen surrounding geology allo!s their use# On e the oal is remo"ed$ usually >? per ent of the se tion$ the roof is allo!ed to ollapse in a safe manner# 'ontinuous mining utilizes a ma hine !ith a large rotating steel drum e)uipped !ith tungsten arbide teeth that s rape oal from the seam# Operating in a Iroom and pillarJ 3also %no!n as Ibord and pillarJ4 systemK!here the mine is di"ided

into a series of ,=&to&G= foot IroomsJ or !or% areas ut into the oaledKit an mine as mu h as fi"e tons of oal a minute$ more than a non&me hanized miner of the +;,=s !ould produ e in an entire day# 'ontinuous miners a ount for about C?H of underground oal produ tion# 'on"eyors transport the remo"ed oal from the seam# Remote& ontrolled ontinuous miners are used to !or% in a "ariety of diffi ult seams and onditions$ and roboti "ersions ontrolled by omputers are be oming in reasingly ommon# Blast mining is an older pra ti e that uses e2plosi"es su h as dynamite to brea% up the oal seam$ after !hi h the oal is gathered and loaded on to shuttle ars or on"eyors for remo"al to a entral loading area# This pro ess onsists of a series of operations that begins !ith I uttingJ the oaled so it !ill brea% easily !hen blasted !ith e2plosi"es# This type of mining a ounts for less than ?H of total underground produ tion in the U#S# today# Shortfall mining$ a method urrently a ounting for less than +H of deep oal produ tion$ in"ol"es the use of a ontinuous mining ma hine !ith mo"able roof supports$ similar to long!all# The ontinuous miner shears oal panels +?=&,== feet !ide and more than a half&mile long$ ha"ing regard to fa tors su h as geologi al strata# Retreat mining is a method in !hi h the pillars or oal ribs used to hold up the mine roof are e2tra tedD allo!ing the mine roof to ollapse as the mining !or%s ba % to!ards the entran e# This is one of the most dangerous forms of mining o!ing to imperfe t predi tability of !hen the eiling !ill ollapse and possibly rush or trap !or%ers in the mine#

E$& '($)%$ta/ 4)-a,t!

'oal mining an result in a number of ad"erse effe ts on the en"ironment# Surfa e mining of oal ompletely eliminates e2isting "egetation$ destroys the geneti soil profile$ displa es or destroys !ildlife and habitat$ degrades air )uality$ alters urrent land uses$ and to some e2tent permanently hanges the general topography of the area mined$ L,FM This often results in a s arred lands ape !ith no s eni "alue$ though rehabilitation an mitigate some of these on erns# Mine tailing dumps produ e a id mine drainage !hi h an seep into !ater!ays and a)uifers$ !ith onse)uen es on e ologi al and human health# If underground mine tunnels ollapse$ this an ause subsiden e of land surfa es# 8uring a tual mining operations$ methane a %no!n greenhouse gas$ may be released into the air#

S.W.O.T Analysis of Indian Mining Industry

4$1 a$ M $ $3 4$1#!t'0

India is endo!ed !ith signifi ant mineral resour es# India produ es F; minerals out of !hi h C are fuel minerals$ ++ metalli $ and ?, non&metalli and ,, minor minerals# In India$ F=H of mining is in oal and the balan e ,=H is in "arious metals and other ra! materials su h as gold$ opper$ iron$ lead$ bau2ite$ zin and uranium# India !ith di"erse and signifi ant mineral resour es is the leading produ er of some of the minerals# The total "alue of mineral produ tion !as Rs# ?<F=>= million in ,===&,==+$ of !hi h the "alue of minerals other than petroleum and natural gas !as Rs# G=<>?+ million# The metalli produ tion is a ounted for by iron&ore$ opper&ore$ hromite andNor zin on entrates$ gold$ manganese ore$ bau2ite$ lead on entrates# 9mongst the non&metalli minerals$ more than ;= per ent of the aggregate "alue is shared by limestone$ magnesite$ dolomite$ barytes$ %aolin$ gypsum$ apatite 7 phosphorite$ steatite and fluorite# India is the !orld6s largest produ er of mi a blo %s and mi a splittings# @ith the re ent spurt in !orld demand for hromite$ India has stepped up its produ tion to rea h the third ran% among the hromite produ ers of the !orld# Besides$ India ran%s Grd in produ tion of oal 7 lignite and barytes$ Cth in iron ore$ <th in bau2ite and manganese ore$ += in aluminium and ++ Th in rude steel in the @orld# O"er +#+ million people are employed in the Indian mining industry# @ith o"er ,$G,< pri"ate and ,;, publi operating mines in the ountry$ minerals form +< per ent of India6s e2ports# C(a/ M $ $3 The ma(ority of the energy re)uirement in India is met by oal$ largely mined in the eastern and the entral regions of the ountry# In ,==C&=?$ the total oal produ tion in the ountry !as around G?= million MT and ma(ority of it atered to the ore se tors of po!er$ steel and ement# Inspite of "arious poli y initiati"es to di"ersify the fuel mi2$ it is be oming in reasingly e"ident that oal !ill ontinue to play the ma(or role in sustaining the gro!th momentum of India# Based on estimates$ the onsumption of oal is pro(e ted to rise by nearly C= per ent o"er the ne2t fi"e years and almost to double by ,=,=# :o!e"er$ in the re ent past$ the oal se tor in the ountry has ome under pressure o"er its inability to meet demand 3both planned and unplanned4 of the user industries# By .o"ernment6s o!n estimates$ oal produ tion !ill lag behind demand by about +== million MT as of ,=+, and by ,?= million MT by ,=,=#

Ma.(' -/a0%'! $ ,(a/ ) $ $3 Na)% (+ C()-a$0 'I0 3-ubli Se tor4 S''0 3-ubli Se tor4 Others T(ta/ P'(1#,t ($ 7008 9MMT: G=< GC ,+ ;61 Note: Excludes NLC production of lignite

T0-%-< !% a$1 Cat%3('0-< !% ,(a/ '%!(#',%! (+ 4$1 a a! ($ Ja$#a'0 1= 7005 9 $ M // ($ T($$%!:: T0-% (+ C(a/ 394 'o%ing *& &-rime 'o%ing &Medium 'o%ing &Semi&'o%ing Sub&Total 'o%ing 3B4 Non&'o%ingO*& Total 3'o%ing 7 Non& 'o%ing4 C<+C ++C+> CF, +<?+G ><CC> ;,;<= <;; ++><? +==G +GC<> +=G<,G ++>=;= & +FF; ,,, ,+++ G?<F< G>>;> ?G+G ,?=>+ +>=> G,=;+ ,+?>?< ,C>FC> P'(&%1 4$1 ,at%1 4$+%''%1 T(ta/

M%ta/ M $ $3 India is ri h in mineral resour es !ith large reser"es of primary metal ores li%e iron ore$ bau2ite$ hromium$ manganese and titanium# India has B

+G billion tonnes of iron ore reser"es B ?th largest reser"e base in the !orld ,#G billion tonnes of bau2ite reser"es B Cth largest reser"e base in the !orld +<= million tonnes of manganese reser"es B ,nd largest reser"e base in the !orld ?> million tonnes of hromium reser"es B Grd largest reser"e base in the !orld

Indian deposits of bau2ite and iron ore are among the best in the !orld in terms of )uality and mineability MineralNOreNMetal S# No# # # + Bau2ite , 'opper metal 3tonnes4 G 0ead metal 3tonnes44 C Pin metal 3tonnes4 ? .old metal 3tonnes4 < Iron ore > 'hromite Ore F Magnesite ; Manganese Ore += 0imestone ++ -hosphorite 3Ro % -hosphate4 +, Sillimanite II .arnet +< Eyanite 3 tonnes4 +> 8olomite +F 8iamond 3 Thousand arats4 CONTR4BUT4ON OF T?E PUBL4C SECTOR The publi se tor ontributes o"er F? per ent of the total "alue of mineral produ tion# :o!e"er$ it is the a"o!ed poli y of the .o"ernment to !ithdra! from the non&strategi se tors and a ordingly the publi se tor underta%ings are being pri"atised in a phased manner# ?+<O ?,O ,F+>===O CGF>O ;F,O >Re o"erable reser"es estimated as on +#C#,=== 3 Based on e2plorationNprospe ting4 5igure in million tonnes unless other!ise spe ified ,C<,O ?,;>$=== ,GF+$=== ;>=>$=== <FO +GC<=O ;> ,C?O +<>O >?<>;O +C, Very large ;= ,<? CGF +; 0ife Inde2 3years4 3m#tonnes4 ,++ F= C? C? Not Estimated +G+ C< ?C, C> ,?C >;

-ubli se tor enterprises li%e the National Mineral 8e"elopment 'orporation$ Eudremu%h Iron Ore ompany$ Steel 9uthority of India 0imited and Orissa Mining 'orporation dominate the iron ore se tor# National 9luminium 'ompany ontributes about G?H bau2ite mining and aluminium produ tion# :industan 'opper 0imited predominates the opper ore mining se tor# 9fter essation of e onomi operations in Bharat .old Mines 0imited sin e ,===$ :utti .old Mines 0imited 3a .o"ernment of Earnata%a underta%ing4$ is the only underta%ing engaged in the mining of gold# Ra(asthan State Mines and Minerals 0imited and 9ndhra -radesh Mining 8e"elopment 'orporation predominate the mining of ro % phosphate and barytes respe ti"ely# 'oal Mining is predominantly a publi se tor a ti"ity & 'oal India 0td# 3'I04 a ounts for F?H of total oal produ tion R(/% (+ th% @(&%'$)%$t The Mines and Minerals 38e"elopment and Regulation4 9 t$ +;?>$ 3MM8R4 and the Mines 9 t$ +;?,$ together !ith the rules and regulations under them onstitute the basi la!s go"erning the mining se tor# 5urther$ the .o"ernment has formulated the National Mineral -oli y$ !hi h !as re"ised in +;;C to permit pri"ate in"estment in e2ploration and e2ploitation of +G spe ified minerals# In +;;;$ the foreign in"estment poli y has been further liberalized to promote 5oreign 8ire t In"estment 358I4 in the mining se tor* > 5or e2ploration and mining of diamonds and pre ious stones$ 58I upto >C per ent is permitted under automati route# > 5or e2ploration and mining of gold and sil"er and minerals other than diamonds and pre ious stones$ 58I is allo!ed upto +== per ent under automati route# > 5or metallurgy and pro essing$ 58I is permitted upto +== per ent under automati route# > -ri"ate Indian 'ompanies setting upNoperating po!er pro(e ts as !ell as oal and lignite mines for apti"e onsumption are allo!ed 58I upto +== per ent# > +== per ent 58I is allo!ed for setting up oal pro essing plants sub(e t to the ondition that the ompany shall not do oal mining and shall not sell !ashed oal or sized oal from its oal pro essing plants in the open mar%et and shall supply the !ashed or sized oal to those parties !ho are supplying ra! oal to oal pro essing plants for !ashing or sizing# > 5or 58I proposals not meeting the abo"e mentioned guidelines$ appro"al !ill be gi"en

by the 5oreign In"estment -romotion Board %eeping in mind parameters su h as pro(e t size$ ommitment of e2ternal resour es for funding pro(e t osts$ the ompany6s mining tra % re ord and finan ial strength$ le"el of te hnology and the India6s -artner E)uity holding A SWOT A$a/0! ! (+ 4$1 a$ M $ $3 4$1#!t'0 St'%$3th!: +# the go"ernment offers a !ide range of on essions to in"estors in India$ engaged in mining a ti"ity# The main on essions in lude$ inter alia* O Mining in spe ified ba %!ard distri ts is eligible for a omplete ta2 holiday for a period of ? years from ommen ement of produ tion and a G= per ent ta2 holiday for ? years thereafter# O En"ironment prote tion e)uipment$ pollution ontrol e)uipment$ energy sa"ing e)uipment and ertain other e)uipment eligible for +== per ent depre iation# O One tenth of the e2penditure on prospe ting or e2tra ting or produ tion of ertain minerals during fi"e years ending !ith the first year of ommer ial produ tion is allo!ed as a dedu tion from the total in ome# O E2port profits from spe ified minerals and ores are eligible for ertain on essions under the In ome ta2 9 t# O Minerals in their finished form e2empt from e2 ise duty# O 0o! ustoms duty on apital e)uipment used for mineralsD on ni %el$ tin$ pig iron$ un!rought aluminium# O 'apital goods imported for mining under E-'. s heme )ualify for on essional ustoms duty sub(e t to ertain e2port obligation# ,# @orld6s largest produ er of mi aD third largest produ er of oal and lignite 7 barytesD ran%s among the top produ ers of iron ore$ bau2ite$ manganese ore and aluminium# G# 0abours easily a"ailable C# 0o! labour and on"ersion osts ?# 0arge )uantity of high )uality reser"es <# E2ports iron&ore to 'hina and /apan on a large s ale

># St'at%3 , /(,at ($ * -ro2imity to the de"eloped European mar%ets and fast&de"eloping 9sian mar%ets for e2port of Steel$ 9luminium W%a6$%!!:

'oal mining in India is asso iated !ith poor employee produ ti"ity# The output per miner per annum in India "aries from +?= to ,$<?= tonnes ompared to an a"erage of around +,$=== tonnes in the U#S# and 9ustraliaD and :istori ally$ open ast mining has been fa"ored o"er underground mining# This has led to land degradation$ en"ironmental pollution and redu ed )uality of oal as it tends to get mi2ed !ith other matterD India has still not been able to de"elop a omprehensi"e solution to deal !ith the fly ash generated at oal po!er stations through use of Indian oal# 'lean oal te hnologies$ su h as Integrated .asifi ation 'ombined 'y le$ !here the oal is on"erted to gas$ are a"ailable$ but these are e2pensi"e and need modifi ation to suit Indian oal spe ifi ations# -oor infrastru ture fa ilities Mining te hnology is outdated 0o! inno"ation apabilities 0abor for e is highly un&s%illed and ine2perien ed :igh rate of a idents 0a % of R78 programs and training and de"elopment Most of the Indian mining ompanies do not ha"e a ess to Indian apital mar%et There is a la % of respe t for the mining industry and it suffers from the in orre t per eption that ore deposits are depleted# There is limited a ess to apital$ and mines are in reasingly more ostly to find$ a )uire$ de"elop and produ e# There are long lead times on produ tion de isions# The Indian mining industry suffers from an out&dated$ unattra ti"e approa h to mining edu ation that is partly to blame for insuffi ient human resour es# 4)-'(&%)%$t $ (-%'at ($a/ %++ , %$,0 (+ th% ) $ $3 ,()-a$ %! - Mining ompanies are in need of an organizational transformation to gradually align its operating osts to international standards# Mining osts of Indian ompanies are at least G? per ent higher than those of leading oal e2porting ountries su h as 9ustralia$ Indonesia$ and South 9fri a# To mat h produ ti"ity$ they !ill need to in"est in ne! te hnologies$ impro"e pro esses in planning and e2e ution of pro(e ts$ and institutionalize a omprehensi"e ris% management frame!or%# Mining operations are not en"ironment friendly# 0east importan e is gi"en to en"ironment on erns# :igh rate of illegal mining

Th% O--('t#$ t %! India has an estimated F? billion tonnes of mineral reser"es remaining to be e2ploited# Besides oal$ oil and gas reser"es$ the mineral in"entory in India in ludes +G$=== depositsN prospe ts of <+ non&fuel minerals# E2penditure outlay on mining is a meager

sum !hen ompared to other ompeting emerging mining mar%ets and the in"estment gap is most li%ely to be o"ered by the pri"ate se tor# India !el omes (oint "entures bet!een foreign and domesti partners to mobilise finan es and te hnology and se ure a ess to global mar%ets#

-otential areas for e2ploration "entures in lude gold$ diamond$ opper$ lead$ zin $ ni %el$ obalt$ molybdenum$ lithium$ tin$ tungsten$ sil"er$ platinum group of metals and other rare metals$ hromite and manganese ore$ and fertiliser minerals# The main opportunities in the mining se tor 3e2 luding oal and industrial minerals4 are in the de"elopment and produ tion of surplus ommodities su h as iron ore and bau2ite$ mi a$ potash$ fe! lo!&grade ores$ mining of small gold deposits$ de"elopment of pla er gold resour es lo ated on the frontal belt of the :imalayas$ mining %no!n deposits of e onomi and marginal ategories su h as base metals in Bihar and Ra(asthan and e2ploitation of laterite for ni %els in Orissa$ molybdenum in Tamil Nadu and tin in :aryana# 'onsiderable potential e2ists for setting up manufa turing units for "alue added produ ts# There e2ists onsiderable opportunities for future dis o"eries of sub&surfa e deposits !ith the appli ation of modern te hni)ues# 'urrent e onomi mining pra ti es are generally limited to depths of G== meters and ,? per ent of the reser"es of the ountry are beyond this depth St'%$3th%$ $3 (+ /(3 !t ,! $ ,(a/ 1 !t' "#t ($ - In India$ the logisti s infrastru ture su h as ports and rail!ays are o"erburdened and ostly and a t as bottlene %s in de"elopment of free mar%et# -ri"atization of ports may bring the needed effi ien ies and apa ities# In addition$ apa ity addition by the Indian Rail!ays is ne essary to in rease freight apa ity from the oal produ ing regions to demand enters in the northern and entral parts of the ountry# On the Indian rail net!or%$ freight trains get a lo!er priority than passenger trains$ a problem that promotes delays and ineffi ien y# Spe ial freight orridors !ould raise speeds$ ut osts$ and in rease the system6s reliability# F(,#! $3 ($ t%,h$(/(30 +(' +#t#'% - India6s numerous te hnology resear h institutes are !or%ing on energy related R78# :o!e"er$ there is a possibility that they are operating in a fragmented fashion# The .o"ernment may get impro"ed re o"eries on its in"estment by on entrating on fe! important te hnology areas# To start !ith fo us may be applied for tighter emission standards and de"elopment of ine2pensi"e lean& oal te hnologies "iz# e2tra tion of methane from oal deposits# Estimated F, billion tonnes of reser"es of "arious metals yet to be tapped @hile India has >#?H of the !orld6s total bau2ite deposits$ aluminium produ tion apa ity is only GH of !orld apa ity$ indi ating the s ope and need for ne! apa ities

Th'%at!:

F('% 3$ 4$&%!t)%$t $ th% M $ $3 S%,t('

8uring +;;;$ the .o"ernment had leared > more proposals of leading international mining ompanies for prospe ting and e2ploration in the mineral se tor to the tune of USQ <,#? million# <? li enses ha"e been issued till date for prospe ting an area of around ;=$+C, s)%ms in the states of Ra(asthan$ Maharashtra$ .u(arat$ Bihar$ :aryana and Madhya -radesh# -rospe ting li enses ha"e been granted in fa"our of Indian subsidiaries of !ell&%no!n mining ompanies# These in lude B:- Minerals$ 'R9 E2ploration supported by Rio Tinto 3RTP&'R94$ -helps 8odge of US9$ Metmin 5inan e and :olding supported by Metdist .roup of 'ompanies UE$ Meridien Minerals of 'anada$ RB@ Mineral Industries supported by @hite Tiger Resour es of 9ustralia$ et #

0arge integrated international metal manufa turers in luding -OS'O$ Mittal Steel and 9l an ha"e announ ed plans for e2pansion in India Mining ompanies and e)uipment suppliers are under the onstant threat of being ta%en o"er by foreign ompanies# 9 hea"y ta2 burden dis ourages further in"estment# -oliti ians under"alue the industry6s ontributions to the e onomy#

Stri ter en"ironment rules restri ting mining a ti"ities