The Next Big Opportunity in Mining Goldrush 

Dear Viewers,

Last month, the Parliament passed an important bill that could influence the fortunes of companies catering to mining ecosystem.

The new Mines and Minerals (Development & Regulation) Amendment Bill allows private companies to mine six out of 12 atomic minerals, including lithium, and deep-seated minerals such as gold and silver.

So far, the mining has been mainly dominated by PSU sector leading to limited activity.

The bill brings in major reforms in the mining sector such as exploration license for deep seated and critical minerals, exclusive auction of mineral concessions for critical minerals, and revenues from these will also accrue to state governments.

A lot of activities related to mining, excavation and exploration earlier that were prohibited will now be allowed.

Currently, the country is dependent on imports for most of the important minerals as there is not much exploration or mining of these minerals due to existing legal provisions. These minerals have high economic importance and considerable supply risk due to geo-political uncertainties.

Over the years, the revised bill could reduce India's dependence on imports for supply of critical minerals used in space industry, electronics, technology and communications, energy sector, electric batteries.

The critical minerals identified include lithium, beryllium, titanium, niobium, tantalum and zirconium. Do note that Li, cobalt and nickel are some of the critical minerals for EV story to take off. The good thing is that huge deposits of Li have been identified in J&K and Rajasthan, India does not mine any of these locally yet.

But this may change soon.

You see Li mining auctions for J&K are expected in the current fiscal year itself.

All in all, the bill is specially conducive to junior mining companies and companies in the supply chain ecosystem.

Now, I'm not going into the details of direct and obvious players in the mining sector like Coal India, GMDC, Hindustan Copper, NALCO, MOIL, OMDC or NMDC and the likes.

For this video, I want to highlight some listed companies in the mining ecosystem that could benefit from this development and you should keep in your watchlist. Do note that this video only aims to share knowledge about the ecosystem, and does not imply any view on any of the companies.

So let's get to these players now based on the stage they could cater To.

The first aspect of value chain is seismic data services - i.e, collection and interpretation of seismic data with the purpose of creating a 2D or 3D image of earth subterrain. The same info is used by oil and gas and mining companies for exploration and drilling.

A major player in India in this regard is Alphageo India Ltd. So far, the company has majorly catered to servicing the hydrocarbon industries or oil and gas sector. But in fulfilling the quest for digging critical minerals online, it could play a critical role.

Asian Energy Services also offers seismic services.

Coming to the next stage...

Extracting and mining activity involves the use of detonators and explosives.

GOCL Corp, a part of Hinduja Group comes into picture here. It makes and sells bulk explosives, in India and export markets.

The sectors it caters to include lubricants, real estate, wind energy, food chemicals, pharmaceuticals, and mining. Currently, mining is a small part of its revenue. But that could change.

Third on the list is Premier Explosives. The company makes industrial explosives and detonators catering to defense, Aerospace, and mining industry.

Fourth is Solar Industries. - globally, a leading maker of bulk explosives with 24% market share in explosive industry, packaged explosives and initiating systems,with applications in mining, construction and infra sector. The company also caters to the defense sector.

Now mining is an activity that requires excavation and use of earth moving equipments. BEML caters to this need not just for mining, but construction, defense and railways as well.

Now that we are on the aspect of movement in mining industry, sixth on this list is International Conveyors Ltd. that makes and sells solid woven PVC covered conveyor belts. The entry barriers in the industry are high, and this is the only listed player in India in conveyor belts. Conveyor belting is critical for bulk transportation of materials like, coal, potash salt etc and no substitute has been found. Economic life cycle of the belting is ~3 years depending on conditions and loads being handled, hence there is a good replacement demand as well. These belts are fire resistant, anti static and are mainly used in underground mines for mineral transportation and are suited to transport any large volume material. Almost 85 pc of revenue for the company comes from international markets as domestic mining so far has been focused on close to surface-based extraction. However, with the recent bill focusing on deep seated minerals, there could be an opportunity for the company.

The seventh and the last on this list is Cyient that could have a role to play with new regulations in the mining sector. It already works with some of the world's largest mining companies and OEMs in plant engineering, asset management, GeoScience data management, extensive geologic data compilation, geospatial data compilation.

Now do note that these are very early stages to declare the winners and losers from this development.

But it would indeed be good to keep a track on how all these companies make use of this opportunity.

A gentle reminder again to keep this candidates for your watchlist and not treat them as recommendations.

Let me know if you found this video useful through your likes and comments. And do share and forward if you do.

Thank you for watching.

Goodbye.