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GMDC mulls value addition with pvt tie-ups

Rutam Vora  |  Ahmedabad 

To start with one for in Kutch

State-run (GMDC) is looking to add value to its mineral products with private partnerships. It sells raw and plans to set up a project for value addition in products at Kutch.

"There is a huge market for value added mineral products and we are looking to tap this opportunity. There are three projects being planned for value addition, but initially we will take up the value addition for bauxite. So far, we have been selling raw bauxite but the value addition will help us increase the value of the mineral by about six-seven times. However, the revenue targets from the project would only be known once the draft project report (DPR) is prepared," said V S Gadhvi, managing director.

The company has identified private partners and is now preparing a DPR for the project. “We prefer partners from within the state and so far, we have already identified a few. The basic documentation, including shareholders' agreement, financial assessment of the partners and fuel supply agreement are over," Gadhvi informed.

GMDC registered a 124 per cent growth in production of bauxite over the past year. "We have seen an unprecedented growth in bauxite mining. It had remained below 200,000 tonnes for several years, but jumped to 700,000 tonnes in 2010-11. In the current year, we are looking to focus on our core competence of mining and will increase the output by about 10-15 per cent in bauxite, as well as in lignite," he added.

In 2010-11, turnover was Rs 1,414.8 crore, up by 33 per cent against Rs 1,065 crore in the previous year. Net profit for the year also jumped by 34 per cent from Rs 280 crore to Rs 375 crore. "Mineral prices ruled higher in the last financial year. But even as international prices showed a steep increase, we managed to protect our customers from the sharp hike in mineral prices. Lignite holds the major share in the company's profits," Gadhvi maintained.

The government of Gujarat holds 74 per cent in GMDC, the second largest lignite producer in India. The company has exclusive rights to mine all key minerals, including lignite, bauxite, limestone and manganese in the state. The company plans to expand the value addition project to other minerals over a period of time.

First Published: Mon, June 06 2011. 01:04 IST