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Indian Mining Industry





Indian Companies Going Abroad
Indian companies are going abroad and acquiring other firms with similar profiles and are also investing their assets overseas. From an offshore oil field in Australia to a steel company in
Thailand, Indian companies are making their presence felt across the globe.

Keeping in view the increasing demand and the scarcity of resources in India, many Indian companies in the public sector are investing heavily in oil fields abroad. To meet the ever increasing demand of this industry's products, especially oil and petroleum products, some of India's state-owned oil firms, like ONGC, have already acquired stakes in oil and gas fields in Russia, Sudan, Iraq, Libya, Egypt, Qatar, Ivory Coast, Australia, Vietnam and Myanmar.
Some data regarding overseas deals, mergers and acquisitions and value of such deals is as follows:

SECTOR VALUE OF OVERSEAS DEALS (US$ mn) % OF DEAL VALUE DEAL VOLUME % OF DEAL VOLUME
Metals & Mining 970.5 11.3% 11 4.5%
Oil & gas 1,587.0 18.6% 13 5.3%


Greater Nile Oil Project in Sudan (Oct '02) is the biggest ever overseas acquisition abroad by an Indian company. The leaders in the mergers and acquisitions in oil and gas sector abroad are ONGC and GAIL. Although the Indian government voted against the deal, ONGC had won a bid for 45% stake in Akpo deepwater oil and gas field in Nigeria from South Atlantic Petroleum for US$ 2 bn. ONGC's global investments include US$ 136.5mn in oil fields in Sudan and US$ 323 mn for the Sakahalin project in Russia.

Indian companies usually pose strong challenge to the global players. In the oil and gas sector of the mining and minerals industry, other players playing a significant role in overseas acquisitions and operations are GAIL (Gas Authority of India Limited) and Indian Oil. Other companies like Aditya Birla's Essar Steel and many such players are acquiring stakes in foreign companies across the world. GAIL has acquired minor stakes in companies in Egypt and
China which are engaged in the distribution of gas.

Amongst the private players, Reliance Energy Limited (REL) owned by Anil Ambani is exploring the options of getting the coal mines in Indonesia and Australia to meet the requirements of coal as raw material for its upcoming projects in Uttar Pradesh and Maharashtra. If the deal under consideration gets finalized, REL's total investment in those fields will be of around $ 500 million.

More than Rs. 150 crore will be invested by Ashapura Minechem - the largest mine owner in India. Investments of Ashapura Minechem, the largest processor and exporter of minerals in India, will be made in a mining plant project in Nigeria. It has entered into partnerships in Nigeria and Belgium.

Entering into joint ventures with foreign players help the Indian players to get acquainted with the latest technology. It also offers them an opportunity to explore new resources for raw materials and markets in different parts of the world.