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BEML sees opportunity as China's mining companies hit a rock

Ananth Krishnan
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Launches a number of high capacity machines

SETTING FOOT: BEML machines on display at the 13th China Mining Congress & Expo in Tianjin, China. — PHOTO: PTI
SETTING FOOT: BEML machines on display at the 13th China Mining Congress & Expo in Tianjin, China. — PHOTO: PTI

As China's mines grow deeper and leaner because of the urbanisation-fuelled rapid exploitation of resources, the country's mining industry is facing an increasingly difficult technological challenge to reach mineral reserves at greater depths, analysts say.

Indian heavy equipment manufacturer BEML said this week it hoped to help China's mining industry fill that gap, launching for the first time a number of high capacity machines, including dozers and dumpers, tailored to the domestic market.

The company unveiled its products in China for the first time on Sunday, during the country's national mining congress which opened in this port city. “With the increase in mining activity in China, there is a need to deploy higher capacity machines,” said C. N. Durgesh, BEML's Director (Mining and Construction) and board member. “In China, there is an increased demand for minerals. BEML offers a cost-effective solution to China's needs.”

S. Vijay Kumar, Secretary, Ministry of Mines, said BEML's launch in China was “a great opportunity” and part of “a larger framework of closer cooperation in mining and mining-technology related subjects with China.” “Both India and China are growing economies with increasing use of raw materials,” he said.

“This requires both countries to do more and more surveys, more and more exploration, more and more mining.”

China's Vice Minister of Land and Resources Wang Min visited BEML's display at the mining congress, and told Mr. Vijay Kumar in talks that he had personally supported the company's entry into the China market, including helping with the often elaborate registration and clearance processes for heavy equipment.

Mr. Vijay Kumar said they had both agreed that there was scope for collaborating on survey and mapping, and he had suggested pelletisation as an area where Chinese technological knowhow could help India.

Mineral exploitation

“But we also said we welcome Chinese investments in India, particularly in mining equipment technologies,” he said. “We do realise it is a two-way process.”

At the mining congress, a number of Chinese analysts expressed concern that the rapid exploitation of mineral resources had enabled recent fast growth of the country's mining industry, but had left long-term challenges. In the first three quarters of this year alone, China has invested 2.6 trillion yuan ($410 billion) in the mining industry, a 28 per cent year-on-year increase. You Hua Jian of the China Land Resources Economic Institute said inadequate investment in research and development was a major barrier to exploiting the country's huge idle reserves.

Despite the demand for high capacity equipment, BEML is likely to face challenges in the competitive China market, both from newly-emerging domestic players and long-established foreign companies in the sector like Caterpillar and Japan's Komatsu. But Indian officials said its entry, to begin with, was a point of some satisfaction, particularly against the backdrop of a rising trade deficit with China — on track to exceed last year's record $20 billion figure — and a persisting failure to diversify exports beyond raw materials such as iron ore.

“One of our challenges is to bring into China value-added products to raise the level of our exports,” Indian Ambassador to China S. Jaishankar said. “And this is not always easy.”


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