Rio Tinto banks on Modi to revive India ventures

Rio Tinto, the world’s largest merchant miner with more than a two-third share of the world’s iron ore business, and significant presence in other minerals and commodities, is banking on Prime Minister Narendra Modi’s business friendly approach to help revive its stalled projects in India.

“We — and I think the whole world — is impressed with the promise the Modi regime brings,” said Rio Tinto CEO, Sam Walsh, adding, “the world — and India — is hoping that this will flow through into change.”

Walsh was speaking at an exclusive interaction with select media in Sydney, where he was a key speaker in the B20 Summit which immediately preceded Saturday’s G20 finance ministers’ meet.

Project in limbo Rio Tinto’s plan to mine iron ore in Odisha, for which it has a joint venture agreement with Odisha Mining Corporation (OMC), has been in limbo for quite some time now, with OMC reportedly not interested in pursuing the project.

In response to a specific query, Walsh said he hoped the regime change will help the project get restarted.

“As you know, I have made many visits to India and have had many discussions with governments and others to get that process moving forward,” he said.

“It is rather bizarre that we are starting to export iron ore to India. That doesn’t make sense. There should be enough iron ore in India to supply its needs. Quite frankly, I’d much rather see this (Odisha) project come to fruition and that we didn’t have to supply iron ore from Australia.”

However, any potential iron ore from India does not figure in Rio Tinto’s plans to scale up its iron ore production from the current 295 million tonnes to 360 million tonnes over the next three years.

Cure to poverty Walsh stressed that infrastructure development — and the consequent creation of jobs — is a better cure to poverty than foreign aid.

He is also hoping that with the BJP coming to power in the Centre, the company’s project to mine diamonds in Banda in Madhya Pradesh will get kick-started.

The company has already built up a substantial presence in the diamond cutting business in Surat. “There are over 250,000 diamond cutters in India who are — not directly, but as a result of our diamond business — cutting our diamonds,” Walsh said.

Stressing that it is important to get the diamond mining process started as there has been no major discovery of diamond made anywhere in the world in quite some time.

“The world will need more diamonds. The project will add value and jobs to the (Indian) economy,” he stressed.

Walsh said that both the projects will be important additions to the two-way business between Rio Tinto and India. Asked whether there are any major policy bottlenecks, he said “most issues have been addressed. What we need now is imple men- tation.”

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