Mining output growth hit 19-month low of 1.2% in signal for March IIP

India’s mining output growth slid to a 19-month low of 1.2% in March, from February’s 8% pace, hinting at a possible slowing in the month’s overall industrial output, the data for which is due to be released by the National Statistical Office on May 10. 

Mining constitutes 14.3% of the Index of Industrial Production, or IIP. Industrial output growth had hit a four-month high of 5.7% in February with mining (8%) and electricity growth (7.5%) lifting the growth rate. Manufacturing constitutes 77.6% of the IIP and grew 5% in February. 

With growth in the eight core sectors decelerating to 5.2% in March from 7.1% in February, economists expect a deceleration in industrial output growth, with some estimating it to slow to 3.5%-5%. The eight infrastructure sectors make up 40.27% of the IIP.

The index of mineral production for March was 156.1, which is 1.2% higher than its level in March 2023, the Ministry of Mines said on Friday. Some of the non-fuel minerals that logged positive growth in March, included copper concentrate, gold, manganese ore, diamond, graphite, limestone and magnesite.

Overall mining output growth in 2023-24 was 7.5%, compared with 5.8% in 2022-23. Iron ore, limestone and aluminium production levels hit new records during the year, the ministry said, rising 7.4%, 10.7% and 2.1%, respectively.

“Healthy growth in production of iron ore and limestone in 2023-24 reflect the robust demand conditions in the user industries — steel and cement. Coupled with the high growth in aluminium, these growth trends point towards strong economic activity in user sectors such as energy, infrastructure, construction, automotive and machinery,” the ministry said.

India is the world’s second-largest aluminium producer, third-largest limestone producer and fourth-largest iron ore producer.