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Kolkata: To break free from the shackled of China which has a dominant position all over the world in rare earth magnets which is extremely important for a variety of industries such as consumer electronics to defence and electric vehicles to high-technology applications, the Indian government has approved a Rs 7,280 crore incentive scheme to promote domestic manufacturing of rare earth magnets. The target: raise production to 6,000 tonnes per year. The scheme was approved by the Union cabinet on Nov 26.
This significant scheme has sung the spotlight on the companies that are active in the rare earths domain. Here are a few companies that are active in this area which will become more and more important as exploration and production of these important minerals pick up. Let's have a look at these stocks.
GMDC is a PSU mining company. It has already established a separate division for critical minerals and signed an agreement with National Aluminium Company (NALCO) for the exploration of rare earths and bauxite. GMDC is developing a large rare earth deposit in the Ambadungar region of Gujarat. The shares of this company rose sharply on Nov 26. They surged by 8.21% touch Rs 528.10. Over the past year, it generated strong returns of 53.67%.
National Aluminium Company (NALCO) is another company that has become very active in this sector. NALCO has tied up with BARC (Bhabha Atomic Research Centre) for developing technology to extract rare earth elements from bauxite waste. NALCO is supposed to benefit immensely from the government's rare earth magnet policy and newly-approved scheme. Its shares rose 1.68% on Nov 26 to reach Rs 258.18.
NMDC is India's largest iron ore producer. It is exploring new opportunities in critical minerals through its subsidiaries and joint venture companies. This could make it a strong contender for rare earth projects in the future. Its shares jumped 2.19% to reach Rs 74.29 on Wednesday, Nov 26.
Vedanta Group is a major mining company controlled by Anil Agarwal. It is also showing interest in the rare earth sector. What is interesting is that its existing zinc and aluminum mines could very well contain monazite deposits and this can give access to rare earth minerals. The shares of this company, too, jumped 2.31% to reach Rs 516.30 on Nov 26.
India has significantly big rare earths in states such as Tamil Nadu, Kerala, Andhra Pradesh, Odisha, West Bengal, Jharkhand, Gujarat, and Maharashtra. Also hard-rock rare-earth deposits have been identified in Gujarat and Rajasthan. But in spite of the reserves, Indian accounts for less than 1% of global rare earth mining and production. Therefore, there is immense headroom for companies in India in this sector.
(Disclaimer: This article is only meant to provide information. TV9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, precious metals, commodity, REITs, INVITs, any form of alternative investment instruments and crypto assets.)
