Australian METS breaks new ground in India’s booming coalmining sector
VLI is a mining equipment technology and services (METS) company that is growing steadily in India’s mining sector. The company’s underground diesel transport vehicles are helping improve output and safety at some of India’s largest underground coalmines.
In this case study, VLI’s India representative explains:
- The importance of steadily building relationships in India’s mining industry
- How Austrade has helped the company make vital contacts
- The potential for Australian METS as India’s mines are modernised and the AIBX program
India’s mining industry opens up to advanced METS
India’s vast mining industry is changing fast. Over the past two years, the Indian Government has begun a program of liberalisation and introduced major reforms. New mining-operating models are attracting private enterprise. Regulation is changing to encourage overseas investment.
Some large coal mines have recently been sold to global mining companies. Overseas ownership often leads to upgrades in safety and productivity. This triggers demand for specialist mining machinery and a new generation of mining technologies.
But India’s mining industry is still reliant on imports for a vast array of modern mining equipment.
VLI vehicles help improve safety in India’s coalmines
VLI has stepped forward. The New South Wales-based company manufactures diesel-powered mine vehicles that are explosion protected for underground operations. They transport miners from the surface to the coal face quickly and safely.
The vehicles deliver a competitive advantage over the electrically powered vehicles that are typically used in underground mines in India. This is because electric vehicles require associated electrical distribution systems and trailing cables, with consequent costs, risks and inconvenience.
But how does an Australian METS manufacturer introduce new-generation technology into India?
‘Our strategy in India was to start small and gradually build confidence in our equipment,’ says Prem Amarr Bhasin, Head India Representative for VLI. ‘India is a huge and growing market. Around 80% of energy comes from coal and demand for energy is growing fast. But we expanded gradually.’
Regulatory changes speed exports to India
One of the big challenges facing overseas METS equipment in India is testing and certification. Until recently, most mining machinery had to be tested in India. Some complex machinery would have to be tested at multiple locations. This was a costly and cumbersome process.
‘When we started we could easily spend thousands of dollars on testing without having a single guaranteed sale,’ says Bhasin. ‘However, the Directorate General of Mines Safety has updated many regulations. This means we can certify our machines on the basis of accreditation gained in Australia.
‘It’s a lot easier to export mining machinery to India now than it was just a few years ago.’
The importance of creating good relationships
Bhasin says the key to VLI’s success is the ability to create connections and build relationships. This is where Austrade played a major role. Advisers in India met with Australia-based VLI executives when they visited the country. Now they work with representatives of VLI that are permanently based in India.
‘Austrade organises functions to help connect Indian miners with Australian METS,’ says Bhasin. ‘We were invited to dinners and working sessions at venues across India. These events were very good at generating contacts. In India, business follows friendship.’
‘Austrade advisers are also very well informed,’ he adds. ‘They provide insights into the mining industry in India, and they market Australian METS capabilities to the right audiences. Partnering with Austrade helped us get known and this was especially important when dealing with publicly owned mines.’
Selling Australian METS into India’s largest underground coalmine
VLI’s first big break came in 2015. The Eastern Coalfields Limited Jhanjra mine in West Bengal near Kolkata is the largest underground coalmine in India. After numerous visits, VLI’s steady approach paid off – and its technology quickly proved its worth.
‘Our technology helped raise output,’ says Bhasin. ‘We supplied the Jhanjra mine with our explosion protected transporters for underground mine workers. This helped raise productivity. Output at Jhanjra rose from 1.5 million tonnes per year in 2015 to 3.5 million tonnes in 2020.
‘We have now sold 5 underground man-transporter systems to coalmines in India,’ he adds. ‘We think sales will accelerate as the boom in mining gathers pace. The new generation of private mine operators in India are looking for high-quality METS.’
Work with Austrade to raise your profile
Bhasin encourages METS companies to work with Austrade in Australia as well as India. He reports that Austrade has arranged trade missions to Australia for executives in India’s mining industry.
‘Austrade has organised delegations from India to Australia and these helped us demonstrate the value of VLI technology,’ he says. ‘With Austrade’s help, we arranged visits to VLI premises in New South Wales. This was a great chance to introduce Indian decision-makers to our company.’
Bhasin says that Austrade continues to help VLI enhance its profile in India.
‘Austrade has invited us to trade shows in Kolkata to help showcase Australian METS,’ he says. ‘Austrade advisers have also engaged with local media to profile how our technology helps to combine safety and efficiency.’
Strong growth anticipated for Australian METS in India
VLI hopes to double the number of sites it sells to in the next few years. Bhasin says Australian METS should become more attractive as government policy focuses on safety and environmental impact.
‘There is huge demand for technology that helps protect the environment,’ says Bhasin. ‘Approximately 90% of mining was opencast until recently. There is now a preference for underground mining and demand for specialist METS is increasing.
‘The energy sector in India will boom over the next 10 years,’ he adds. ‘VLI has built a reputation in India by demonstrating the value of our technology. We are confident we can grow as the sector transforms.
‘We have also submitted proposals to help extract dangerous methane gas from underground coal mines. This will help improve safety and productivity in many mines in India. We hope to introduce VLI technologies to India’s heavy oil extraction as well, in the near future.’
How Austrade can help
Austrade is ramping up initiatives to help Australian companies export to India. This is because opportunities are growing fast.
Market liberalisation is affecting multiple sectors of the Indian economy – from mining to passenger transport. India is on target to become a US$5 trillion economy by 2025.
To help Australian businesses explore and pursue opportunities, the Australian Government has launched the Australia India Business Exchange (AIBX) program.
AIBX provides insights, advice, and business connections to grow two-way trade and investment between Australia and India.
Find out how to get involved in AIBX. Contact Austrade online or call 13 28 78.
The Australian Trade and Investment Commission (Austrade) is the Australian Government’s international trade promotion and investment attraction agency.
We deliver quality trade and investment services to businesses to grow Australia’s prosperity. We do this by generating and providing market information and insights, promoting Australian capability, and facilitating connections through our extensive global network.
To discover how we can help you and your business, visit austrade.gov.au or contact us on 13 28 78 (within Australia).
Whereas every effort has been made to ensure the information given in this document is accurate, the Australian Trade and Investment Commission does not provide warranty or accept liability for any loss arising from reliance on such information.
©Commonwealth of Australia 2021