GMDC sees growth doubling by end of next financial year

Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS GMDC, Ashapura Minechem, Unitech: India Capital's top picks ALSO READ See latest News about Guj Mineral See previous management interviews See what other Experts & Brokerages are saying about Guj Mineral Guj Mineral BSE | NSE 09/02/12 Are Mutual Funds betting on Guj Mineral?

VS Gadhvi, Managing Director of Gujarat Mineral Development Corporation (GMDC) sees growth doubling by the end of next financial year. He believes there are no caveats to the mining policy, and says, "The Gujarat government has put the entire mining policy on fast track."

Below is a verbatim transcript of the interview. Also watch the video.

Q: By when does the decision of the Gujarat government to reserve all bauxite bearing areas in the state for GMDC come into effect and potentially how positive could this be for you?

A: The recent decisions taken by the state government has put the entire mining policy on a fast track. Certain critical minerals have been kept reserved for GMDC and also to ensure that value addition activities take place - either GMDC can do it or GMDC can enter into the joint venture with the various companies. So basically this policy will trigger the growth of not only bauxite but all other minerals - lignite and other minerals, which are available in the state.

Q: By when will this lease be granted to user such as you though?

A: The policies already have come into force and the necessary rules and necessary issues are being resolved to put it on the ground.

Q: We understand that the captive user should be willing to establish units in this state to produce value added products. But any other caveats with granting this license that the government has asked of you?

A: No, certainly not because ultimately the policy does not create roadblock in the development of the minerals. But it is just to facilitate the growth of the minerals and minerals related development in the states. So, there is absolutely no caveat.

Q: What kind of revenue potential or growth potential do you see now with these leases is in place? How much do you think you can mine over the next few years and do you see exponential growth from your business from bauxite, manganese, lignite now that you have fresh raw materials sources in place?

A: Certainly because right now our experience with lignite, our experience with bauxite, we in any case mine more than 1,800 million tonnes of lignite. Therefore with this government orders on ground, we see atleast double the growth by the end of the next financial year.

Q: Just one clarification on whether this entire bauxite bearing area license course only to GMDC or to some other Gujarat-based companies as well?

A: The point is that the mining license should go to the Gujarat Mineral Development Corporation, which is the premier government-owned corporation. But yes, for the development of minerals and for value additions activities, Gujarat Mineral Development Corporation would enter into joint venture to develop and to value add the minerals, which are being mined.

Q: You said double the revenue growth going into next year - any rough numbers of what the kind of growth trajectory it is that you are looking at?

A: Since the government orders have been issued very recently, so we are working out on that. But within a next one-and-half-year because the progress will accelerate because recently we have been given permission to offtake manganese also from the Shivrajpur mines, where mining took place from British days.

Now we have put everything in order to ensure that the maximum mining in the scientific way takes place and also value addition factories, value addition units are located at the critical places.