Insight - Opportunities for Australian METS innovations in India

Mining plays a major role in the Indian economy. High growth in metals and energy consumption has created a robust demand for minerals, and in 2016-17, around 1,900 mines across the country reported production worth A$51.5 billion.

India produces significant quantities of many minerals – including barytes, lignite, iron ore, bauxite, manganese, and zinc – but coal is the most important.

The world’s third largest coal producer after China and the United States, India mined a projected 724.71 million tonnes in 2016-17, while production is expected to reach one billion tonnes by 2019-20. Public sector owner, Coal India, the world’s largest coal producing company, has set high growth strategies, mining 598.61 million tonnes of coal in 2016-17.

Iron ore also plays an important part in India’s mineral production, with the country’s ore output recently returned to high-growth volumes following a period of reconstruction.

The Indian government is preparing a blueprint to increase the country’s overall mineral production by 15 per cent per year, and to support these ambitious growth plans India’s mining companies are seeking substantial technological inputs from international suppliers in order to expand, modernise and begin new projects.

Australia’s Mining, Equipment and Technology Services (METS) suppliers can help fill some gaps here. There are now around 35 Australian METS companies active in India, either with a direct presence or working through partners, agents, or distributors. A number of Australian firms are also having success by doing business remotely, operating from Australia into India.

Coal – going underground

In India’s coal sector, there is a strong push to go underground. The government has stated that underground production needs to increase, and this is an area where India needs more modern technology. ‘With underground mining, you not only keep the flora and fauna intact on the surface, you can also reach good quality coal that cannot be accessed through open cut mining,’ explains Amar Bhasin, who represents METS manufacturer, Valley Longwall International, in India.

India has many old, still-active ‘legacy’ mines where coal is extracted by drill and blast. ‘This method of mining makes for small scale production,’ says Mr Bhasin.

‘Our company produces, manufactures and supplies underground in-seam directional drilling that incorporates gas drainage and also does longwall direction exploration so that miners get advanced warning if there are problems ahead.

‘India does not produce this equipment, so we get it from Australia,’ he explains. The world’s largest supplier of underground in-seam direction drilling services, Valley Longwalls’ specialist in-seam drilling services include seam, fault delineation, coring, and cross block drilling.

Valley Longwall also produces a heavy-duty diesel-powered vehicle, the Driftrunner, manufactured in New South Wales, which has been designed to transport both personnel and a range of materials, and to operate in underground terrains.

Australian products work in the harshest mining environments

The often bleak and barren environment which miners have to contend with in Australia has led Australia’s METS companies to develop a range of products that work in even the harshest conditions. These are of particular interest to the Indian METS market, where the landscape can be similar.

Perth-based technology company, Motium, is producing a TUFF Panel PC which has been taken up by Indian companies such as Tata Steel. This fixed installation rugged tablet has been engineered to work in the most difficult environments, where miners might encounter continuous vibration with high shock levels, wide temperature ranges, and ambient light levels from full sunlight to full darkness. The TUFF Panel PC also comes with low power consumption and a range of connectivity choices to suit different conditions.

Another Australian company, the Melbourne-based Trakblaze, has had success in the Indian METS market with its In-Motion Dumper weighbridge system. ‘We’ve just had a substantial order from Hindustan Zinc for this product in our ‘Force’ line,’ says Trakblaze Business Development Manager, Scott Mayman.

‘We use load cell technology in our weighbridge system and our product is tamper proof,’ Mr Mayman notes. ‘It’s also very robust, making it possible to accurately weigh trucks at speed, which saves both time and money.’

He emphasises that a product must be durable for the Indian environment, ‘just as it has to be durable for what we encounter in Australia,’ and adds that ‘all of these Trakblaze benefits and features are backed up by the support of the company’s local office and trades’.

Meeting the needs of the Indian market

Entry into the Indian market can often take quite some time and products must meet specific needs for Indian customers. Motium’s Business Development Manager, André Gadellaa, says that the company was exhibiting at the MINE Expo in Las Vegas when a customer they had dealt with indirectly many years before came to the show and talked to them about the pressures they were under to develop the right type of product for the Indian market. What they currently had didn’t meet either their performance or price requirements.

‘So, we put together a product that did exactly what they needed,’ Mr Gadellaa says. ‘We understood that we not only needed to provide a PC that can be used out in the field, but that our product’s reliability should not come at an extra cost, and that support for the product can be done locally. So we provided all of that.’

Opportunities for Australian METS companies in India

André Gadellaa says that in his experience, Australian flexibility in providing products is unmatched. ‘Australia’s proximity to India is important here, because we have to deal with a similar environment. There’s also less of a language barrier than with some other countries.’

Scott Mayman from Trakblaze highlights the fact that technology is becoming a big part of the mining sector everywhere, and that this is where Australia shines and where there are opportunities for Australian companies. He advises Australian companies to watch the Indian market carefully for potential openings.

Austrade’s Trade Commissioner in New Delhi, Tim Martin, cites a number of areas where there are specific opportunities for Australian METS companies in India.

‘General consultancy, of course,’ he says, ‘as well are consultancy on specific mining methods.

‘Australian companies also have a lot to offer in mining IT, such as mining planning software; mineral quality control, including coal analysis and characterization; and safety, health and risk, such as risk assessment concepts and methods.’

He also points to opportunities in training in all its forms. ‘Training can be anything from executive development programs to virtual reality mine facilities, hi-fidelity mining machinery simulators, and training courses delivered in market.’

Mr Martin adds that reforms to India’s mining sector – in mining legislation and in regulatory rules – are also offering opportunities for Australian METS companies in India.

Market entry strategies

Chris Freer, Valley Longwall’s Global Manager Drilling and President of International Business Development, says that Australian companies entering the Indian market need to have deep pockets – ‘but you have to be smart enough not to overspend to establish yourself in India.

‘Any products or services you offer need to be market leading, and they have to be sustainable from a distance because initially you’ll have to support them from far away,’ he points out. He also notes that Joint Ventures in developing economies are only successful in around 10-15 per cent of cases: ‘You have to find ways to establish the company yourself because you need more control in the early days of the business in how you develop it.’

He adds that a long-term outlook is essential in planning to do business in India. ‘There is no such thing as a short-term outlook,’ he says.

‘A long-term strategy must also include support mechanisms and a shift to in-country ops, and you must have on-ground support and training to develop people in-country to run the business there eventually.

‘You have to develop the local people along with your business in order for it to be sustainable,’ he advises.

Read more about business opportunities in India or contact info@austrade.gov.au