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Mineweb article : India moving to tie up ....

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TO FUEL INTERNAL GROWTH Now India moving to tie up strategic global minerals supplies India is reportedly to follow China's lead in using government entities to tie up strategic mineral supplies from around the world to help enable it to maintain economic growth. Author: Lawrence Williams Posted: Friday , 12 Feb 2010 LONDON - Some say that the British invented bureaucracy and the Indians perfected it! Certainly dealings with Indian government departments seem to take forever amidst mounds of paperwork. But now the Indian government recognises that its usually slow movement in completing deals potentially sets it at a disadvantage to countries like China where state organisations have learnt to move quickly and decisively. This has been seen particularly in tieing up access to global mineral resources which the China sees as vital for the years ahead with its rapidly growing internal development. India is a country which faces many of the same problems as China, but is a few years behind in terms of internal growth but, like China, its GDP is growing at an enormous rate in comparison with the West, where economies are, at best, static for the moment. To fuel this growth India too needs access to major mineral resources - metals, minerals, oil and gas - but has been much slower than China in doing the deals which can guarantee future supplies in a competitive environment, and at a time when there are doubts about the medium to long term availability of many strategically important metals and minerals. Thus the Indian government is reportedly moving to fast track deals to secure future supplies for its ever-growing industrial base. According to a report in today's Hindustan Times The Prime Minister's Office (PMO) has decided that the country's state-owned corporations need to be supported in aggressively pursuing the acquisition of strategic mineral resources through a dedicated fund - and it has set a 30-day deadline for such plans to be in place. According to Hindustan Times, an unnamed senior government official told it "The PMO has asked the Finance Ministry and the Planning Commission to work out the size and structure of the dedicated fund in 30 days." One of the key elements in the proposal too, is that the country's normally slow procedures will be circumvented by setting up the centralised body with rapid strategic and decision making powers. The Indian government seems to be taking China's CIC as its model and is very conscious the Chinese fund is using a significant part of its US$200 billion of government money to acquire stakes in natural resources overseas. Oil and gas has been the prime target, but metals and minerals, have also figured high on the list among other strategic investments. Whether it will follow CIC's example in investing also in U.S. property and stocks including in the SPDR Gold Trust gold ETF is uncertain, although gold might be of interest given the country's populace's propensity to own the yellow metal. Certainly India has already followed China's lead in this respect with even the state-run Post Office and state-owned banks selling gold bars and coins to the people. The significance of the Indian move should not be underestimated. Indian growth is currently matching that of China and with the two Asian potential megapowers with enormous populations taking ever increasing volumes of raw materials from the global supply, the pressure on resources can only increase dramatically. According to the report, India is also beginning to try and use diplomatic pressures to help secure supplies with the External Affairs Ministry tasked with a strategy to help acquire them, particularly in Africa which is seen as key area of potential supply with resources frequently directly controlled by government.