India is poised to become a major market for mining equipment, even larger than China, according to US-based Bucyrus International, a world leader in manufacturing equipment for the surface and underground mining industry.
Despite being a fast growing market, China's marketing potential for mining equipment was lesser than India, owing to its limited natural resources, Timothy W Sullivan, president and chief executive officer of Bucyrus International, told Business Standard.
India scores over China in having abundant reserves of coal, which offer a huge market for mining equipment, he added.
Sullivan pointed out that power generation, especially from coal, will be one of the prime drivers of growth in India. The country can capitalise on its ample coal reserves to produce coal gas, which can power automobiles, he said, citing the example of China, which has the largest coal liquefaction operation in the world, worth $30 billion.
Apart from coal companies, there were a host of steel plants and sponge iron units, that can benefit from quality mining equipment.
Moreover, the appreciation of the Indian rupee against the US dollar would facilitate the availability of these equipment in India at a lower cost, he said.
The company, which has set up its India headquarter in Kolkata, plans to have pan-India operations and support its units at Singrauli (Madhya Pradesh). The company also intends to cash in on the presence of the PSU major Coal India in the city.
"We have entered into an agreement with CIL for the supply of equipment to its open cast as well as underground mines," Sullivan said.
CIL can immensely improve its productivity and efficiency by aligning with us, he claimed.
Bucyrus is also negotiating with National Mineral Development Corporation and Bharat Earth Movers for supplying its mining equipment.
Sullivan admitted that the import of equipment from the US to India is not always viable and to overcome this problem, the company intends to set up a manufacturing unit in West Bengal in another five years. Bucyrus is planning to enter into 'Marc' contracts with its clients, under which the company would offer lifetime guarantee for its machinery.
The 'Marc' contract, which is valid for 10-15 years, can also be renewed after expiry. The company has already inked two Marc contracts with Singareni Colleries Company, based in Kothagudem (Andhra Pradesh).
