Embracing the Rental Revolution
The mining industry in India plays a vital role in the country's economy by providing necessary resources to industries such as construction, manufacturing and energy production, contributing approximately 3 per cent of total GDP. It is a significant source of employment, directly employing more than one million people and providing multiple opportunities. India is rich in diverse mineral resources, including coal, gold, iron ore, copper, zinc, etc., which form the foundation of the mining industry and support overall nation development. Coal mining is particularly significant as India is one of the largest producers and consumers of coal and iron ore, meeting a substantial portion of its energy requirements. India ranks fourth globally in terms of iron ore production.

The present Indian government has implemented various initiatives and policies to promote the growth of the mining sector, attracting foreign investments, implementing regulations, and ensuring sustainable practices. However, the industry faces challenges related to environmental concerns, land acquisition, regulations, and the need for modernisation and technological advancements and machinery.

Rental companies have emerged as key contributors to this sector by offering a wide range of services, and equipment for smooth mining operations. This article talks about the significant contribution of rental companies in India's mining sector, including an analysis of their equipment’s, services, and other relevant factors. The importance of rental companies in the mining sector is due to several factors. Firstly, they provide cost-effective solutions, allowing mining companies to reduce upfront capital investments Instead of purchasing expensive equipment outright, mining companies can rent the required machinery from rental companies, freeing up capital for other crucial aspects of their operations.

We always talk about benefits of renting equipment over buying expensive high capital equipment. Rental is certainly a way forward in all the sectors including building, roads, power generation and mining segment. Overall rental penetration has been significantly increased in last six years though as compared to roads and building mining segment rental penetration is a bit low but its increasing on YOY basis due to awareness and availability of latest mining equipment with the rental companies, much more deliberations needed to increase rental penetration in Indian mining sector.

Secondly, rental companies offer a wide range of machinery and equipment tailored to the needs of various mining activities. This wide range of products ensures that mining companies have access to the right equipment for various tasks, such as excavation, material handling, transporting and crushing. By renting equipment as and when needed, mining companies can optimise their operations without the burden of owning and maintaining a large fleet of machinery. Rental companies also now a days offer right telematics and IOT solutions which enables mining companies to track and monitor their rented equipment and vehicles in real-time. This technology enhances operational efficiency, reduces costs, and improves safety in the mining industry.

Rental companies in the mining sector provide an extensive selection of equipment to cater to the diverse needs of mining operations. Excavators, bulldozers, wheel loaders, dump trucks and crushers are some of the key products offered.

Excavators are heavy construction equipment used for various mining tasks, including digging, material handling, cutting and demolition. Bulldozers are heavy-duty machines used for pushing and dozing large quantities of soil, rocks, and other materials during mining operations. Wheel loaders are designed to lift and transport materials such as soil, rocks, and other bulk mining materials. Dump trucks are specifically designed for transporting materials, such as ores and minerals. Crushers and screeners are used for crushing and separating different materials in mining operations.

Rental companies also provide various services that contribute to the efficiency and success of mining operations. These services include equipment maintenance, technical support, and training and operator support. Skill Council for Mining Sector (SCMS) promoted by FIMI and supported by Ministry of Mines is the apex body to train and meet the requirement of skilled workforce for the mining industry in PPP mode, setup by National Skill Development Corporation (NSDC) under the Ministry of Skill Development & Entrepreneurship (MSDE). Proper training helps mining companies maximise the performance of the rented machinery and maintain a safe working environment for their operators.

Rental companies ensure that their equipment is well-maintained and serviced regularly to minimise downtime and maximise productivity. They offer technical assistance and troubleshooting services to mining companies and provide prompt support to address and resolve equipment breakdowns or technical issues.

Terms and Conditions
Rental companies in the mining sector operate based on specific terms and conditions, which are mutually agreed upon with their clients. These terms and conditions typically include:

  • Rental rates: The cost associated with renting the equipment, typically charged on a monthly basis in India. The rental rates may vary depending on factors such as the type of work, capacity, location and the duration of the rental period. The equipment rental market in India is relatively competitive and price sensitive, with numerous rental companies and suppliers offering similar services.
  • Rental period: Rental periods in the mining sector tend to be relatively long due to the nature of mining operations. Companies prefer to rent them for extended periods to maximise their return on investment. Rental periods can range from a few months or even years, depending on the nature and scale of the mining operation.
  • Machine maintenance: Rental companies owe responsibility for routine maintenance and repairs with the help of manufacturer and its dealer network, while lessees are expected to handle minor maintenance tasks and return the equipment in the same condition as received as a wet lease model which is quite popular in India.
  • Insurance: Is usually covered with rental companies for any accidents, theft or losses that occur during the rental period. Customised insurance policy to safeguard rental company’s interest is a need of an hour.
  • Relevant factors to consider when engaging with rental companies for mining operations, several factors should be taken into account:

  • Equipment availability: Ensuring that the rental company has the necessary equipment available to meet the specific requirements of the mining project for smooth operations
  • Equipment health: Rental PDI (Pre-Delivery Inspection) inspections hold significant importance for mining companies when renting equipment. These inspections serve as a crucial step to ensure that the rented equipment is in optimal condition, safe to use, and meets the specific requirements of the mining operation.
  • Rental company credentials: Considering the rental company's reputation and experience in serving the mining sector. Mining companies should research the market and seek recommendations to ensure they engage with reputable rental companies that have a proven track record of delivering quality equipment and services. Similar way rental companies should also conduct due diligence of the mining company before engaging the equipment to ensure smooth recoveries.
  • Support system: Timely equipment delivery and on-site technical assistance is crucial at mining sites. Rental companies that can provide round-the-clock support contribute significantly to the smooth functioning of mining operations.
  • Rental companies play a vital role in India's mining sector, providing a diverse array of products, services, and specialised equipment to cater to the unique requirements of mining operations. They offer cost-effective solutions, a comprehensive inventory of equipment, and reliable maintenance support, enabling mining companies to optimize their operations without significant capital investments. By carefully considering factors such as equipment availability, condition, reputation, and flexibility, mining companies can establish successful partnerships with rental companies, harnessing their expertise to enhance efficiency and productivity within India's mining industry.

    Rental companies in India should prioritise adapting technology and safety protocols in the mining segment as soon as possible. The mining industry is inherently challenging and carries significant risks to worker safety, operational efficiency, and environmental impact. By leveraging technology and implementing robust safety protocols, rental companies can greatly enhance their offerings and contribute to safer and more efficient mining operations.

    Satin Sachdeva is Founder and Secretary General at Construction Equipment Rental Association (CERA).