The JV company Minova Runaya Pvt Ltd (MRPL) is building a manufacturing plant at Bhilwara in Rajasthan to produce rock bolts, resin capsules, injection chemicals, wire mesh and ventilation products for the domestic and potentially offshore markets from early next year. The plant was said to have capacity to initially generate about US$60 million of products a year.
India's mining industry has been hit by COVID-19, with Orica rating it among a group of key markets that had seen a "significant" impact from the pandemic. Australia and the US, by comparison, had seen "minimal" impact.
But Orica managing director Alberto Calderon said on the company's FY20 half-year results conference call in May while gold, copper and aggregates had pushed explosive production volumes up in the important US market, "we are beginning to see some decrease in coal".
"The one that is mostly feeling it is Minova," Calderon said of the fallout from reduced thermal coal production in the US and a possible secular decline in the industry.
"The underground coal is particularly the first thing they cut [when prices are down]."
Minova FY20 first-half revenues were A$263 million versus $291.2 million in the same period in FY19. EBIT was $11.1 million in H1 FY20 ($6.9 million FY19).
Orica counts India and China as key potential growth markets for it's A$2 billion-a-year Australia Asia Pacific business, dominated by Australia.
Runaya Metsource has been described as a "start-up" company for a number of years. The Bhilwara plant is expected to employ about 2,000 people.
Naivedya Agarwal, son of billionaire Vedanta Resources chairman Navin Agarwal, said Runaya aimed to "develop businesses focusing broadly on material sciences, and manufacture products with high technology applications through alliances and partnerships with global leaders".
"We are looking forward to bringing transformational enhancements in safety standards and operational efficiency, by leveraging our technology-enabled solutions," he said.
"The facility in Bhilwara, concurrent with the government of India's vision of Make in India and Atmanirbhar Bharat, will provide products and services which were thus far unavailable in the country and had to be imported."