GMDC lignite production falls 19%

Weakness in mining activity during recent months is also visible in lignite production at the state-run Gujarat Mineral Development Corporation (GMDC). The company produced 19 per cent less lignite during April against the corresponding month last year.

Similarly, lignite production in the month of May was lower by over to 19 per cent on year-on-year basis. According to the data provided by GMDC officials, the company produced 9,76,000 tonnes of lignite in April 2013, against 12,02,000 tonnes in the same month in 2012. For the month of May, the lignite production stood at 9,18,000 tonnes as against 11,35,000 tonnes in the same month last year.

Company sources informed that companys Tadkeshwar mines continue to face reduction in seam thickness, which has fallen from seven meters earlier to half at around 3.5 meters.

Reduction in lignite seam thickness has led to fall in production at Tadkeshwar. However, steps are on for shifting to thicker lignite seam at Tadkeshwar region, but that will take some time, said a company official declining to be quoted. Also, Bhavnagar mines have witnessed higher thickness of stones, thereby hampering mining activity.

The weakness in overall mining sector is evident from the fact that mining production has fallen. However, demand continues to remain firm from both big and small industries. Therefore we do not rule out a possibility of a price hike for key minerals in near future, said the company official.

GMDC mines lignite from mines in Tadkeshwar, Rajpardi, Panandhro, Mata No Madh and Bhavnagar.

Also, the company is in the process to finalise the suitable player for six mineral-based projects. We have received the bids and analyzing the same. A suitable bidder will be finalized after our next board meeting, another senior company official said on condition of anonymity.

The projects involve setting up of various mineral-based projects that will use the mineral deposits such as lignite, limestone, silica sand and ball clay among others, which are currently available with GMDC.

The projects include a cement manufacturing plant with capacity of 2.5 million tonnes per annum (TPA) at Kutch, which will use limestone available there. Also, 5 projects of 100 megawatts each from the deep seated lignite deposits available in Gujarat will be developed.

Looking at the number of units coming up and increasing demand for minerals the fall in mineral production will further jack up the prices, said an industry source.

Nationally, too, lignite production witnessed a decline during the month of April at 3.9 million tonnes, lower by 28 per cent on year-on-year basis. Notably, the mineral sector has shown a negative growth of 3.1 per cent during April 2013 as compared to that of the corresponding month of previous year, a central government data showed.