1

Madhya Pradesh: Means business

Mineral Industry

2

Overview

MP is the second largest State in the Country stretching over 308,000 sq kms.

The State is blessed with large mineral resources of coal, diamond, limestone, methane etc.

MP is among the top 4 states of the Country for industrial investments.

Per capita GSDP USD 369** Manufacturing sector USD 8.5 bn**

(Registered & Unregistered)

Gross state domestic product (GSDP) USD 23,983.63 Mn**

Average growth rate 5.5% per annum

Advantage MP

Total electricity generation capacity 6,449.25 MW*

India’s first greenfield SEZ Indore SEZ

Industrial Centers 8

The State is centrally located

Investor friendly Government policies

Madhya Pradesh has one of the upcoming industrial base in India

Economic Snapshot Madhya Pradesh is emerging as a key growth center for the Country

Madhya Pradesh (MP) – State that means businessOverview

MP is rich in low grade coal suitable for power generation. Potential of hydro-energy generation. Installed power capacity (MP’s share)

Hydel Power Generation: 852.7 MW* Thermal Power Generation: 2,147.5 MW*

Power Electricity generation capacity at present is 6,449.25 MW and estimated to rise to a surplus in 2008-09

*Ministry of Power (powermin.nic.in) **Source: Indiastat.com (as on 23 Feb 2006)

3

RO

AD

NET

WO

RK

AIR

POR

TSR

AIL

WA

Y N

ETW

OR

K

• The State is well connected with the rest

of India with almost 425 trains passing

through the State on a daily basis. Of

these 175 trains pass through the State

capital Bhopal alone.

• The total length of roads spanning MP is 67,600 kms.**

• National highways of 5,200 kms run through the State.*

• 18 National highways including trunk routes of Delhi-Mumbai, Delhi-Chennai, Delhi-Bangalore, Delhi- Hyderabad.

• The total length of State highways in the State is 9,885 kms.**

• Convenient linkages to western ports i.e. Kandla Port, Jawahar Nehru Port Trust.

• 25 airstrips.**

• Convenient air links from key Indian cities like Delhi & Mumbai to Bhopal, Jabalpur, Gwalior, Indore and Khajuraho.

• 5 operational airports.

• Indore airport has the capability of handling international cargo.

• An international airport proposed in Bhopal.

Enabling Infrastructure

MP IS CENTRALLY LOCATED AND WELL CONNECTED WITH ALL MAJOR CITIES IN INDIA

*Source: Department of Road Transport & Shipping (morth.nic.in) **Source: www.destinationmadhyapradesh.com

INDORE BHOPAL

JABALPUR

GWALIOR

KHAJURAHO

4

Third largest producer of cement in India*

12 blocks with reserves totalling 2,585 million tons of coal has been identified

Largest producer of pulses and oilseeds in the Country (~75% of soyabean production)

31% of the State under forest cover with a largely unexploited species of rare, valuable medicinal- herbal plants

Over 2,000 kms of roads being developed with Private Partnership (BOT)

Over 18,000 technical graduates and 230,000 graduates add to workforce each year

Over 144 BCM of coal bed methane reserves available

Over 100 agricultural farms with an area of over 20,000 acres is available on lease to investor

India’s 1st operational Greenfield SEZ at Indore

Favourable climatic conditions for cotton and over 40,000 power-looms are driving the textile industry

Availability of coal and natural gas (G.A.I.L pipeline) along with support from Government to make investment in Thermal Power Plants lucrative

Offers diverse tourists destinations catering to various segments of tourism such as religious (Bhojpur), eco/ adventure (Panchmari), heritage (Sanchi, Khajuraho) tourism etc.

Madhya Pradesh: A Preferred Investment Destination

Various blocks available for power, cement, iron and steel units

*Source: www.mpsidc.org & Brochure: MP Means Business

5

0%

20%

40%

60%

80%

100%Vishakapatnam

Chennai

Greater Noida

Chandigarh

Jaipur

Indore

0

50

100

150Mumbai

Delhi

Bangalore

Chennai

PuneHyderabad

Indore

Bhopal

Ahemadabad

Mumbai(780 Kms)

(MPV - 1000) Pune(800 Kms)

(MPV - 206.51)

Bangalore(1400 Kms)

(MPV - 254.52)

Chennai(1430 Kms)

(MPV - 362.84)

Hyderabad(840 Kms)

(MPV - 257.9)

Delhi(740 Kms)

(MPV - 789.5)

Ahmedabad(570 Kms)

(MPV - 220.63)

Kolkata(1350 Kms)

(MPV - 613.19)

Key Markets(Distance From Bhopal)MPV – Market Potential Value

Source: (Reference: RK Swamy)

MP: The Right Place with the Right Environment

MP is centrally located. The State is at an easy distance from all the key consumer markets in the Country.

DESTINATION MADHYA PRADESH

- Distances rounded off**Source: India Today (September ‘06 Issue)

Fastest mover* in overall performance among the big States in the Country.

Fastest mover in agriculture

Fastest mover in infrastructure development.

Ranks 2nd in terms of governance.

Ranks 3rd in terms of law & order

Cost of skilled labour is USD 2.4/day vis-a-vis USD 3.5 – USD 4.0/day in metros

* Fastest mover is the State where the rate of improvement between 2003 & 2006 was greater than that between 1991 & 2003

Bhopal and Indore have substantial cost advantages, even when compared to other Tier III and IV cities.

Savings in Office Space Rates (A comparison of rates in Central Business Districts)

The cost of land is one of the lowest in the Country. Even central hubs such as Indore and Bhopal fare well against other cities in terms of low land cost.

(Estimated Values for Multi-product SEZs)

Savings in Land Cost

6

Industrial Policy: Catalyst for the InvestmentsThe Government of MP has devised an investor friendly industrial policy, which is aimed at achieving global competitiveness. The policy emphasizes on industrial growth in the state through adopting cluster approach, establishing specialized infrastructure and offering favourable incentives.

The main thrust of this policy is:

• Establishment of a Madhya Pradesh Trade and Investment Facilitation Corporation which would take decisions about rationalization of taxes, facilities of mega projects and other related matters.

• Enacting an Industrial Facilitation Act and to change the rules of business with a view to make single window system decisive and result oriented.

• Developing infrastructure for supporting the identified industrial clusters

• Reviving closed down/ sick industrial units by granting special packages.

• Attractive incentive schemes.

CLUSTER APPROACH• Indore – Pharmaceutical, Textile, Food

Processing, IT, Auto Components

• Bhopal – Engineering, Biotechnology, Herbal, IT, Food Processing

• Jabalpur – Garment, Mineral, Forest & Herbal, Food Processing

• Gwalior – Electronics, IT, FMCG, Engineering, Food Processing

• Rewa – Refractories, Lime Stone, Forest Based

• Sagar – Mineral Processing

• Special package for Mega Projects on project basis by apex level investment promotion empowered committee headed by the Chief Minister.

• Industrial investment promotion assistance – 50% to 75% of commercial tax for 3-10 years

• Concessional registration charges and stamp duty exemption for Term Loans.

• Interest subsidy on term loan for 5 – years @ 3% to 5%.

• For thrust sector industries, 25% capital subsidy would be provided limiting up to a maximum of USD 56,000

• Land on 75% concessive rate for Mega Projects limited to USD 4.4 million.

• Entry tax exemption for 5 years.

• 5 years electricity duty exemption on captive power generation

• 15% capital subsidy to SSI up to USD 33,000 in backward areas

• Infrastructure grant up to USD 0.22 million crore for developing private sector industrial parks

• Partial reimbursement for Project report, ISO Certification, Patent and Technology Purchase cost

SPECIAL INCENTIVES

SP

EC

IALI

ZED

INFR

AS

TRU

CTU

RE Crystal IT Park Indore

Food Parks Mandsaur, Khargone, Chhindwara, Hoshagabad, Mandla and Bhind

Stone Park Katni

Herbal Park Rewa

Granite Park Chhatarpur

Life Sciences Project Bhopal

Apparel Park Indore (SEZ)

Gems & Jewellery Park Indore

7

Area Developed: 2,492 Hectares

Allotted: 1431 Hectares

Units established: 575

Major Groups: Tata, Ranbaxy, Eicher,

Bridgestone, Hindustan Motors, Kinetic,

SRF, S Kumars, Gajra, Nicholas Piramal,

Indorama, IPCA, Bhilwara

Special Infrastructure: SEZ, Crystal IT

Park, Food Park, Apparel Park

In a bid to build a competitive environment; industries and their ancillaries would be promoted in clusters based on the availability of raw materials,

skilled labour and market potential. Under this Industrial Policy through Madhya Pradesh Audyogik Kendra Vikas Nigam Ltd (MPAKVNs)

scheme, the State Government, has identified industrial clusters. Many of the industrial giants have their establishments in these areas, however 44% of

developed area is still untapped and open for investment.

Total developed area

7,147 Hectares

Total allotted area 3,089 Hectares

Total units established 1,360

Growth centres 19

Doing Business Made Easy Through MPAKVNIN

DO

RE

AK

VN

Area Developed: 1,330 Hectares

Allotted: 618 Hectares

Units established: 286

Major Groups:HEG, Crompton

Greaves, P&G, Godrej, Lupin, IFB,

Oswal, Nahar

Special Infrastructure: ICD, Food

Park

Area Developed: 2,262 Hectares

Allotted: 800 Hectares

Units established: 326

Major Groups: JK, Surya Roshini,

Godrej, Grasim, Cadbury, Hotline,

Crompton Greaves

Special Infrastructure: ICD, Food

Park

Area Developed: 273 Hectares

Allotted: 115 Hectares

Units established: 121

Major Groups: Birla, Jaypee

Special Infrastructure: Integrated

infrastructure development centres

(IIDC)

Area Developed: 790 Hectares

Allotted: 125 Hectares

Units established: 52

Major Groups: Raymond, Hindustan

Petroleum, PBM, Ayur

Special Infrastructure: Stone Park,

Food Park

BH

OPA

L A

KVN

GW

ALI

OR

AK

VN

JAB

ALP

UR

AK

VN

REW

A A

KVN

Pithampur, Kheda, Dewas, Maksi, Megh Nagar

Malanpur, Malanpur Phase II, Banmore, Chainpura, Siddhgawan, Pratappura

Rewa, Waidhan

Borgaon, Maneri, Purena

Mandideep, Pillukhedi,

Mandideep Phase II

Source: MPSIDC

8

Mining & Minerals Industry in Madhya Pradesh

9

Mining: Mainstay of the Economy

MP : Mineral Hub of India

Location Analysis

Advantage MP

MP: An Investment Destination

Way Forward

Exploring the Opportunities: Project Profiles

Sector Profile: Minerals

10

Mining: Mainstay of the Indian Economy

Value of Mineral Performance in India

India is the world’s largest producer of mica blocks and mica splittings; third largest producer of chromite; third in production of coal & lignite and barytes; fourth in iron ore; sixth in bauxite and manganese ore; tenth in aluminium and; eleventh in crude steel.

India is endowed with significant mineral resources and produces 89 minerals classified as fuel mineral (4); metallic mineral (11); non-metallic mineral (52)and; minor minerals (22).

The mineral sector accounts for 11% of the Country’s industrial production. 

The total value of mineral production (excluding atomic minerals) during 2005-06 is estimated at USD 16.7 billion, wherein fuel minerals contribute the largest share (USD 12.54 billion).

During the year 2004-05, the provisional value of export of ores and minerals was approximately USD 15.41 billion, in which diamond (mostly cut) was the major export item accounting for 67.1% of the total exports, followed by iron ore (20.1%) and granite(3.7%).

The key mineral producing states of the Country includes Madhya Pradesh, Chhattisgarh, Jharkhand, Andhra Pradesh, Maharashtra, Orissa, Rajasthan, Tamil Nadu etc.

Various international mining companies such as BHP Minerals- Australia, Meridian Peak Resources- Canada, Metdist- UK, Phelps Dodge Corporation- USA and Rio Tinto- UK among others, have received licenses for mining in the Country.

Value Contribution of Minerals in India

Source: Ministry of Mines, Govt of India

Source: Ministry of Mines, Govt of India

11

Mining: Mainstay of the Indian Economy

The public sector is a dominant player in the sector and contributes over 85% of the total value of mineral production. 

However, recently Indian non-coal mining sector has fully opened the doors for private investment (both domestic and foreign).  The changes/ modifications in the Mineral Policy, have made India comparable to any liberal regime existing in other major mineral producing countries in the world.

The mineral sector is highly fragmented where 95% of operating mines produce about 50% of the value of the minerals, thereby providing an opportunity of consolidation..

As a result of economy boom, resurging industrial production and rapid infrastructure development, the demand for minerals is growing fast in the Country. The emergence of a vibrant middle class has created demand for base metal products, in addition to the traditional demand for gold and silver.

This has lead to the need of systematic search and evaluation of new deposits and intensive exploration of the same to boost the production of the reserves of minerals.

In this regard, India is looking for state-of-the-art technological and management expertise, which can improve productivity through good planning and design of mines, reduction of costs, and optimisation of smelting and refining operations and by-product recoveries.

Status of Mineral Reserves in India

Source: Tata Energy Research Institute.

12

MP : Mineral Hub of India

Overview: The State of MP has a rich and vast mineral deposits which

includes diamond, slate, pyrophyllite, diaspore, coal, limestone, copper ore, manganese among others. Besides, the state also has favourable geological and geotectonic settings.

The State ranks third in the Country in mineral production.

Active mining of these minerals is generating revenue of more than USD 118.65 million per annum.

MP is the sole producer of diamond in India.

The State has 41.36% (largest) of the total national reserves of copper ore. It houses India’s largest opencast copper mine at Malanjkhand, district Balaghat.

It boasts of the thickest coal seam (135m) of Asia at Singrauli coalfield in Sidhi district.

MP is the major producer of limestone and third largest cement producing State with a share of 14% of total cement production in the Country.

It is also the major producer of Coal, Diaspore and Pyrophyllite, Manganese, Dolomite, Glass sand and Fire clay.

The State is fast emerging as a dimensional stone producer

Major reserves of Coal Bed Methane (CBM) have also been identified in the State.

Reserves of Important Minerals of M.P. v/s India

M.P.’s Mineral-wise Revenue (2004-05)

Source: http://www.mp.nic.in/geologyandmining/

Source: Directorate of Geology & Mining, MP

Source: Directorate of Geology & Mining, MP

13

MP: Mineral Hub of India

Mineral-based Industry No. of Units Location

Cement 7 Rewa, Satna, Damoh, Katni, Neemuch

Thermal Power 10 Shahdol , Umaria, Sidhi, Satna, Betul, Damoh, Katni, Rewa, Ujjain

Hydrated Lime 25 Katni & Satna

Slate Pencil 155 Mandsaur

Roofing (Manglore)Tiles 8 Hoshangabad, Balaghat

Marble cutting& polishing 4 Katni

Granite cutting& polishing 5 Chhatarpur, Tikamgarh

Mineral Reserves & Mineral Based Industries in M.P.

Mineral based industries in the State has been a major driver in infrastructure development and employment in the related regions.

Mineral Based Industries in The State

The land parcels in the eastern, south-eastern and western belts of M.P. are the rich in various mineral reserves.

Most of these minerals are supplied to other states in crude or semi-processed forms for commercial use and further processing.

Due to the large availability of minerals, several mineral-based industries have come up in and around these areas. Some of these industries are cement, thermal power, coal washeries etc.

The mining industry along with the downstream/ allied industries have been the major source of employment in the State.

14

MP: Mineral Hub of India

In order to harness the benefits of marble deposits in and around the Katni district, the State has come up with the Stone Park at Hardua.

The Park is spread over an area of 120 acres and would house 40 units.

It would focus on production, cutting, polishing, finishing and export of marbles.

The location is in proximity to highway and railway station making it easy for transportation.

M.P. Industries Development Corporation has been appointed as agency to development the infrastructure for Stone Park.

The Government has also proposed: - Granite Park in Tikamgarh/ Sagar/ Chhatarpur and; - Diamond Park in Panna

Gems and jewellery park is proposed to be set-up in Indore. The Park would focus on cutting, polishing, designing and

marketing of precious stones and gold jewellery and export of the same.

Land area of about 7 acres have been proposed for the Park, which could house about 200 units.

The proposed site is very close to Indore airport (2.1 km) and railway station (15 km).

M.P. Export Corporation Limited would promote the park, develop the scheme and provide management for setting up units in the Park.

Taking Mineral Industry a Step Further…

The State has proposed to set-up Mineral-based industrial parks to give an impetus to the industry. The cluster approach adopted

by the Government would support the core mineral industry as well as the allied/support industries such as jewellery making,

crafting, cutting, polishing etc. The units/ companies in these parks would enjoy various fiscal and non-fiscal incentives that would

be offered by the State Government.

Further, these clusters/ parks would have two pronged benefits for the State Government and industries wherein it will be a

source of generating employment in the State and would be a source of skilled manpower required for specific industries.

STONE PARK, KATNI

GEM & JEWELLERY PARK, INDORE

15

Location Analysis

MP belt constitutes of the oldest group of rocks comprising of Archaeans and Proterozoic formation that constitutes nearly 45% area of the State. Further, other younger formations also have a significant presence, thereby justifying the vast and varies mineral reserves.

In addition to this, M.P. is centrally located and well connected through road and rail to other states. This makes the transportation of crude minerals/ ores from M.P. to other states relatively easier. Further, M.P. has proximity to the major industrial states of the Country such as Maharashtra, Gujarat, Uttar Pradesh etc.

The State is the major source of raw material for the sustenance of the industries in other states. It supplies bauxite, manganese, copper ore, marble etc. to various states of the Country, as shown in the figure.

The vast unexploited mineral reserves in the State, offers a long term strategic opportunities to national and international mining companies.

Bauxite, Manganese

Manganese, Cement

(Limestone)

Bauxite, Cement

(Limestone)

Marble, Copper Ore

(concentrated)

Diamond

16

MP Offers following Advantages to Mining/ Mineral Industry

Advantage MP

Primary Advantage

MP can cater to all the activities across the value chain

Mineral Exploration Mining Mineral

BeneficiationDownstream

industries

Coal

Undertaken at a very large scale

Thermal power plants (captive & non-captive plants)

Limestone

Undertaken at a very large scale

Cement manufacturing & supplying units

Slate

Finishing units in the State at local level

Big units for roofing, slate pencils, cladding & decorative things

Diamond

Unfinished diamonds are sold through auction

Cutting & polishing unit

Marble/ Granite

Small cutting & polishing units

Cutting & polishing unit & export unit

Copper Ore

Concentration of ore & supply to refineries in other States

Refineries in the State and supply/ export extracts

Indicative minerals

Secondary Advantages Vast mineral resources

Cost Competitiveness Land prices are highly competitive as compared to other regions

like Maharashtra, Andhra Pradesh, Gujarat etc. Labour cost is less as compared to other mineral intensive

states. Cost of living in M.P. is much lower vis-à-vis other industrial

states in the Country.

Quality Human Resource Disciplined workforce and claims zero man days lost in past

several years in the State. Large pool of skilled technical people along with the skilled

labour force.

Well Established Infrastructure High end technology used for mapping the mineral resources in

the State and mining of the same. Good connectivity through road and rail to other states acts

beneficial for transporting raw/crude minerals Well established industries such as thermal power, cement,

refractories, cutting and polishing units in the State, reemphasises the advantage of its strong industry base and technical know-how.

17

MP: An Investment Destination

Priority status given to setting-up of industrial parks such as Granite Park, Gem & Jewellery Park and Stone Park.

Mineral Concession on export quality deposits of Granite, Marble etc shall be granted on priority to entrepreneurs who are willing to establish 100% Export oriented units in the State. 

All those areas reserved for Public Sector Undertakings shall be dereserved for private entrepreneurs if mining has not commenced in such areas so far or if they have not secured Mineral Concessions and started mining. State Government has granted Reconnaissance Permits to various private entrepreneurs for searching diamond, base metals & other pollymetalic mineralisation

Incentives given to Stone Park includes, rebate in premium for the allotment of land, facility of payment of premium in installments, “Single Window” system, permission to mortgage mining lease hold rights for obtaining the term loan, special cell of Directorate of Geology & Mining to provide guidance, marketing support to the Park.

Exemption from electricity duty given for 5 years to industries for their captive power plants (thermal) for which the effective steps have been taken within a year and where the units commence their power generation within the 3 years.

Government Incentives & Initiatives

What Makes it Further More Attractive is the willingness & support of the State Government to the industry and the increasing demand for minerals and mineral based products in MP and other neighboring states.

Demand drivers

Potential opportunities

Government support

There is year round demand for cement, marble, granite in the neighbouring states such as Maharashtra, Uttar Pradesh etc, where the real estate and infrastructure industry is witnessing a boom. With vast presence of limestone, marble and other such minerals M.P. is considered as favourable destination for cement manufacturers and other mineral based units.

The abundance of natural resources, large part of which still remains unexploited coupled with the growing economy and rising consumption levels, presents the huge potential for establishing large industrial bases.

The State Government is providing various incentives and concessions to the mining and mineral industry which are mentioned below:

18

MP: An Investment Destination

Minerals Government/ PSU Private Companies/ Organisations

Coal

B.L.A Industries (Coal washery)Subsidiary company of Coal India ltd viz, South Eastern Coal Field Ltd, Northern Coal Field Ltd, Western Coal Field Ltd.

Copper Hindustan Copper Ltd ( Govt of India Public Sector)

Cement (Limestone)

ACC LtdSatna CementBirla VikasMaihar CementPrism CementDiamond CementJP CementBela cementVikram Cement

Diamond National Mineral Development Corporation

Flagstone Several small entrepreneurs

Manganese Manganese Ore India Ltd

Marble RK marbleOjashwi Marble

Rock Phosphate, Pyrophyllite, Diaspore, Granite, Bauxite

Madhya Pradesh State Mining Corporation (Govt of MP undertaking)

There is active participation of both public sector as well as private sector in the mining and mineral industry. The major players in various mineral areas are given in the adjoining table.

Several other players have also evinced their interests in the sector and major players that have recently allotted/ commenced their units are as follows.

Madhya Pradesh State Mining Corporation (MPSMC) has formed joint venture with Madhya Pradesh State Electricity Board (MPSEB) and Sainik Mining to use coal in Amelia district, Sidhi for thermal power generation in the State.

MPSMC has formed joint venture with JP Associates for coal mining in Amelia North. JP Associates would use this coal for installing thermal power plant with power generation capacity of 500 MW.

Hindalco and Essar Power would use the coal block in Mahan area for power generation capacity of 650 MW and 1000 MW respectively.

Further in Cement sector also companies such as SAIL in joint venture with JP Associates, Rewati Cement etc are also coming up with their cement manufacturing plants.

MP is the tested grounds for various mineral-based and allied industries.

MP offers you vast natural resources, along with the necessary infrastructure and skilled human resource. The successful presence of major international and national players along with the supportive Government, provides you ample opportunities in the mineral industry in the State.

19

The Way Forward…

Mineral (Industry) Reserves Available

Limestone (Cement plants) Limestone reserve at: Damonh-Panna region (~8 million tons) Bela-Pagra of Rewa region (~ 20 million tons) Raghurajnagar and Nagod Tehsil in Satna

Coal (Captive power plants) Four blocks of coal deposits in Chindwara district are brought into captive list

Flag Stone (cutting, polishing & finishing units)

217 hector area of flag stone deposit of international standard is present in Shivpuri district

Marble (cutting, polishing & finishing units)

Deposits of marble available in Mundwara and Bahoriband Tehsil in Katni. Good quality marble of various colours are expected in these regions.

Granite (cutting, polishing units) Vast deposits in Chhattarpur region

Rock Phosphate (Fertilizer plant) Second major producer in India. Reserves in Jhabua and Chhattarpur district

There are various reserves and related industries in the mining and mineral sector where lies large investment opportunities. Following are some of the identified reserves and the potential opportunities are given below.

Opportunities in Mineral-based Industry

Mineral reserves identified for private investors

Technology partner with the Government for mining

Opportunities in Mining Industry

20

Directorate of Geology & Mining, Govt. of MP

Madhya Pradesh State Industrial Development Corporation

Madhya Pradesh Industries Development Corporation

Madhya Pradesh State Mining Corporation

http:// www. mp.nic.in/geologyandmining/

http://www.mpsidc.com

Connecting Further

Government of Madhya Pradesh http://www.mpgovt.nic.in