OZL 0.75% $15.85 oz minerals limited

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    India's importance growing for miners

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    Sarah-Jane Tasker | November 08, 2008

    INDIA is becoming increasingly important to Australian miners, as the cashed-up country looks abroad to feed its need for resources.

    Austrade's New Delhi-based senior trade commissioner Peter Linford said as countries around the world struggled to survive the financial downturn, India was one of the least affected and still maintained a strong demand for resources.

    China was the buzzword in Australia when the sector was booming, but with the economic powerhouse feeling the effects of the global downturn, India's importance is starting to rise.

    "China has been in everybody's focus but India is where China was 5-10 years ago and companies are starting to realise the potential," Mr Linford said.

    "India is a much more domestically driven economy, relying less on exports as a percentage of GDP. According to the IMF, India's exports (as a percentage of GDP) were 21.2 per cent, nearly half that of China's at 40.7percent."

    The fall in the Australian dollar has also made local projects more attractive. Industry experts say that on average, compared to three months ago, it is now about 50 per cent cheaper to buy into some Australian stocks.

    This week, more than 50 Australian companies showcased their mining expertise at India's largest mining event in Kolkata, at which mining opportunities for Australian companies in India were discussed.

    Mr Linford said Australian companies were increasingly looking to India for future expansion.

    "Opportunities in the US and Europe have flattened for Australian companies," he said.

    Following the conference in India, Mr Linford said he expected several announcements to be made on deals struck between the two countries.

    "There are cashed-up individuals and companies in India. They have a different banking system there. There is no run on the banks as we have seen elsewhere."

    Australian-based India Resources is already involved in India through its copper mine in Jharkhand, Eastern India

    Operations director Arvind Misra said India had previously been considered a suspect country to invest in because of bureaucratic delays.

    But he said the country was now moving in the right direction with new policies and systems to aid foreign investment.

    "We were one of the first foreign-owned companies to have a mine in the country and we have had a fairly smooth tendering process," he said.

    Resources Minister Martin Ferguson addressed the Indian exhibition this week, telling delegates that Australia believed India was at the heart of a historic shift in political and economic influence.

    "Our future is linked to that of India and our other Asian neighbours, and our economic growth will be powered by their growth," he said.

    "We want to invest in the development of India's mining industry to help unlock its wealth for the Indian nation and we will continue to welcome Indian investment in our own resources and energy sector."
 
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