About the Mining and Mineral Products Sector
Minerals are precious natural resources that are important raw materials for several industries, such as construction and manufacturing. Therefore, the growth of the mining industry is important for the country's overall industrial development. India is mainly self-sufficient in metallic minerals, such as chromites, bauxite, iron ore, lignite, etc. The industry has the potential to impact India’s GDP growth and foreign exchange earnings immensely.
In FY 2023, the overall coal production in India saw a surge to 893.08 MT from 728.72 MT in FY 2019. India is the third largest energy-consuming country globally, where the demand for electricity is high, hence the demand for coal. India produces 95 minerals, including 4 fuel, 23 non-metallic, 10 metallic, 3 atomic and 55 minor minerals.
Future Outlook of the Mining and Mineral Sector in India
The Indian mining sector is anticipated to see a major change in the next few years, aided by reforms, such as the Make in India Campaign, Rural Electrification, Smart Cities and a focus on building renewable energy projects under the National Electricity Policy. The mining industry is expected to contribute US$ 47 billion to the country’s GDP by 2025.
Things To Consider Before Investing in the Mining and Mineral Sector
- Resource assessment: Evaluate the country's mineral resources, considering the diversity of metallic and non-metallic minerals. Assess the potential for growth and sustainability in mining operations.
- Regulatory environment: It is very important to understand the regulatory framework governing mining activities. Stay informed about changes in policies, licenses, and environmental regulations affecting the sector.
- Global demand: Monitor global trends in mineral demand, especially for key minerals like coal, iron ore, and rare earth metals. Assess how international dynamics may influence the sector. High demand can impact the company’s profitability.
- Infrastructure development: Consider the impact of infrastructure development on mining operations. Adequate transportation and logistics are crucial for efficient mineral extraction and distribution.
- Technological advancements: Stay updated on technological advancements in mining processes. Innovations can enhance efficiency, reduce costs, and minimise environmental impact.
- Environmental and social impact: Assess the environmental and social implications of mining activities as they play a crucial role in the mining sector. Sustainable and responsible practices are increasingly important for long-term success and community relations.
- Commodity price trends: Keep an eye on commodity price trends, as they directly impact the financial performance of mining companies. Fluctuations in prices can significantly affect profitability.
- Geopolitical risks: Evaluate geopolitical risks that may affect the supply chain and export of minerals. Consider the potential impact of trade tensions, sanctions, or geopolitical conflicts.
How To Invest in Mining Sector Stocks?
Investing in mining and mineral products stocks via Angel One is easy. Simply follow these steps:
- Log in to your Angel One account.
- Click on the search icon and look for your desired mining and mineral products stock.
- Now, place your buy order. Simply click on the ‘Buy’ button, enter your desired quantity, and select the order type.
- To complete your transaction, click on the ‘Buy’ button.
If you don’t have a Demat account with Angel One, you can open one for free online within minutes.
