Andhra Pradesh Mineral Development Corporation (APMDC) is expecting to increase its revenues to Rs 550 crore in the current financial year from Rs 318 crore last year on the back of firm global demand for barytes mineral, which is the single-biggest revenue earner for the state-run mining company.
India is the second-largest producer of barytes (mostly used in oil and gas extraction) after China. APMDC enjoys a near-complete monopoly over the mineral in the country as Andhra Pradesh accounts for most of the barytes reserves as well as 98 per cent of the country's production.
“We had revised the prices of the mineral in August 2011 to Rs 4,000 per tonne from the earlier price of Rs 2,200 through open tenders. We will see the full impact of the price revision on our top line in the current financial year,” MK Meena, vice-chairman and managing director of APMDC, told Business Standard.
The corporation’s revenues stood at Rs 219 crore in 2010-11, prior to the current upside in barytes prices.
For the first time, the company was able to sell B-grade barytes last year due to the rise in global demand for the mineral, according to him.
According to Barytes Association statistics, India produced one million tonne of barytes as compared to 3.6 million tonne by China in 2010. The year 2010 also marked the recovery in global production of the mineral to seven million tonne from 6.2 million tonne in 2009, whereas the same during the pre-recession years was in the range of 7.5 to 8.5 million tonne, according to the association.
However, in 2011-12, APMDC alone produced 1.6 million tonne of the mineral, of which about 0.5 million tonne was of B-grade quality, Meena said.
The increased global demand for the mineral was also fuelled by the cut in exports from China as the world's largest producer is now looking to keep the reserves for domestic use for the years to come, according to him.
The mineral is largely seen as a foreign exchange earner as the domestic consumption in 2010 was estimated to be just about 350,000 tonne with the major consumers being ONGC and Indian Oil Corporation.
The increase in global demand for barytes is directly linked to oil and gas operations around the world as 84-90 per cent of the mineral is only used in oil and gas extraction to increase the density of drilling mud, owing to high mass density and the inert nature of the barytes, which is said to have no substitute.
The mineral is also consumed by other industries as a weighing agent in paints, rubber and plastic products for making TV and computer screens, automobiles among others.
The increase in revenues from the sale of barytes has come in handy for APMDC, which is now looking at raising Rs 400 crore to partly fund the development of a coal mine in Madhya Pradesh.