Shares of mining major GMDC are sharply higher by over 10 percent on September 5, trading close to its record high with a combined volume of over 2.25 crore shares on NSE and BSE, more than 60x the one-month average a short while ago.
In the last one week, the shares are up 25 percent and on YTD basis, the shares are higher by 56 percent.
The company has been in focus of late with the Centre planning a concerted push towards rare earth mining to secure supplies, as well as the company's stated plans to foray into new mining ventures.
The renewed surge in the sessions comes as CNBC-TV18 reported that India has been in talks with Peru and Chile for critical mineral supplies, and for the first time, a separate chapter on rare earths have been included in the ongoing negotiations of a Free Trade Agreement (FTA). The second round for these negotiations took place last week, and the next set of talks are slated in October. As the demand for renewable power sector and EVs grows, Centre has been looking to secure supplies of the critical minerals required in these supply chains. As part of the negotiations with the Latin American nations, New Delhi has been seeking preferential rights for these assets.
GMDC has lined up a capex of Rs 13,000 crore till 2030, which translates into a steady investment of between Rs 1,500-2,000 crore every year. Approximately Rs 3,000-4,000 crore have been allocated for two critical mineral projects, the company has said. In Odisha, the company has three blocks, the largest being Baitarani West, for which groundbreaking is expected this year, and which GMDC says will in future become the company's largest mine with capacity of 15 MTPA, and likely amongst India's top 12-13 mines.
"We have made our intention that we will be entering the critical mineral space, one is rare earths and the second is copper. A lot of hard work is underway. The value drivers will be rare earths which go towards making permanent magnets," Managing Director Roopwant Singh had said in the June quarter earnings call.
On September 3, Centre had approved a Rs 1,500 crore incentive scheme to develop recycling capacity in India to separate and produce critical minerals from recycled sources. The scheme will have a six-year tenure from FY26-31 to scrap out critical minerals from e-waste, Lithium Ion Battery (LIB) scrap, catalytic convertors in end-of-life vehicles, among other sources. The incentives will comprise of 20 percent capex subsidy on plant and machinery for starting production, as well as incentive on incremental sales.
Minister for Petroleum and Natural Gas Hardeep Puri recently said that India has launched explorations at over 1,200 sites and is structuring partnerships for processing and recycling to ensure EVs, renewable power and semiconductors are 'never hostage to external choke-points'.
There has also been an increased momentum in R&D activities in exploration, extraction, processing and application of critical minerals essential for green energy transition and strategic sectors. The National Critical Mineral Mission is aiming at 1,000 patents across the critical minerals value chain by FY31, encouraging innovation of indigenous technologies.
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