According to Dilip Khanna, a partner at Ernst & Young, "from all economic parameters, the next level of growth for India will come from the African continent", and mining for the resources India needs for its economic development is pivotal to sustaining its remarkable rate of growth in the years ahead.
Mining prospects in Africa present great opportunities for such a commodity-hungry nation as India; the Democratic Republic of Congo (DRC) has around 40% of the world's cobalt reserves, South Africa has around 90% of the world's platinum and Guinea has around 30% of the global bauxite reserves and some of the largest deposits of iron ore in the world. The potential of mining is particularly interesting as many areas have not been closely surveyed and so there is likely to be much more to discover.
India has a lot to offer Africa. Its fast-growing economy can provide investment funds, particularly in building mining-related infrastructure. The subcontinent teems with skilled graduates ready to facilitate technology transfer. India also possesses expertise in agriculture that is particularly readily applicable to African farms. Indian firms are keenly pursuing African potash and phosphates for use as fertilisers in Congo, Eritrea, Ethiopia and Ghana. An industry body is calling for the Indian government to establish a $20bn fund for purchasing resource assets overseas.
Nirmalya Kumar, author of India's Global Powerhouses: How They Are Taking on the World, believes that the scale of Chinese investment in Africa has led to something of a backlash, opening the door to Indian companies. Another factor driving Indian mining investment in Africa is that Environment Minister Jairam Ramesh has prevented the extraction of large quantities of low-grade thermal coal, essential for Indian power production. The country's Supreme Court judges intervened in 2011, banning all mining in the southern Indian state of Karnataka. The court was responding to a committee's findings that revealed the scale of deforestation and environment damage being done in the region, where some 35mt of iron ore were being produced each year. These difficulties at home naturally led to Indian companies looking further afield and Africa is particularly attractive - especially since there are sizeable Indian migrant populations present in Africa.
As a result, there are large numbers of Indian companies engaged in mining in Africa and any number...