GMDCLTD - Gujarat Mineral Development Corpora Share Price

The management outlined an optimistic growth trajectory focusing on lignite, coal, and critical minerals. Key points include:

1. Volume Targets: Targeting over 9 million tons of lignite in FY25, aiming for 15 million tons annually by 2030. Coal production from Odisha's Baitarani-West block is expected to start in early FY26, with eventual annual capacity of 26 million tons across three blocks.

2. Expansion Strategy: Diversification into coal (aggressive development in Odisha) and critical minerals (Rare Earth, multi-metals). Rare Earth projects (3-year horizon) and multi-metal mining (1.5"“22-year mine life, 40%+ margins) are prioritized.

3. Capex Plans: INR 3,000+ crores annually through FY30, funded via internal accruals and controlled debt (debt-equity ratio below 1). Focus on lignite expansion, coal block activation, and critical minerals.

4. Power Plant Revival: Akrimota Thermal Plant (250 MW) to resume operations post-overhaul by December 2024, targeting profitability in FY25 through revised PPA and outsourced O&M.

5. Strategic Goals: "Mission 18.0" (selling 18 lakh tons of lignite in monsoon 2024) and "Mission 2000" (expanding active customers to 2,000+).

6. Long-Term Vision: Quadrupling revenue by 2030, with balanced contributions from lignite, coal, and critical minerals.

Overall, management emphasized volume-driven growth, operational efficiency, and strategic diversification to drive long-term value.

Question 1: What are GMDC's volume targets for FY25 and FY26, given Tadkeshwar's revival? What is the rationale for coal mining in Odisha, and what is the progress on multi-metal and Rare Earth projects?
GMDC targets over 9 million tons of lignite in FY25, aiming to improve further in FY26. The Odisha coal blocks were chosen for strategic growth, with production expected to start in early FY26 after land acquisition and approvals. The multi-metal project awaits regulatory clarity before mine development tenders, while Rare Earth projects (Ambadongar) are advancing, with GMDC as the preferred allottee.

Question 2: How is GMDC transforming its business beyond lignite, and what growth is expected in core operations over 3"“4 years?
GMDC's 2030 plan aims to quadruple revenues, with lignite remaining a core driver (targeting 15 million tons annually by 2030). New ventures like coal and critical minerals (Rare Earths, multi-metal) will diversify revenue, targeting equal contributions from lignite, coal, and minerals by 2030.

Question 3: What are GMDC's lignite pricing strategies and margin expectations?
Lignite pricing is benchmarked to imported coal, with current margins around 30%. Focus remains on volume growth, customer expansion (Mission 2000), and monsoon sales (Mission 18.0 targeting 1.8 million tons in Q2). Margins are expected to remain stable.

Question 4: When will coal projects contribute to revenue, and what are the capex plans?
Odisha's Baitarani-West coal block targets groundbreaking in Q1 FY26, with production starting soon after (low stripping ratio). Capex is INR 3,000+ crore annually, funded via internal accruals and debt (debt-equity ratio <1). Coal revenue is expected from FY26 onward.

Question 5: What is the status of Akrimota Thermal Power Station (ATPS) post-PPA amendment?
ATPS (250 MW) is under overhaul, with operations to resume by December 2024. Revised PPA terms and outsourced O&M contracts aim to turn it profitable by FY25.

Question 6: What is the revenue target from non-lignite sources under Project Shikhar?
By 2030, revenues are projected to quadruple, with coal and critical minerals each contributing ~33% alongside lignite. Rare Earth and multi-metal projects are pivotal, with production expected in 3+ years.

Question 7: What return metrics guide coal block investments, and how is capex financed?
Coal projects target 15% IRR (minimum 12%). Capex (INR 3,000+ crore annually) leverages internal accruals and controlled debt, ensuring debt-equity ratio stays below 1.

Question 8: What are the copper deposit details in multi-metal projects?
The copper-lead-zinc deposit has 1.5"“1.75% copper content, 10% total metal content, and a 15"“22-year mine life. Margins exceed 40%, with mine operationalization timelines pending regulatory clarity.

Question 9: How will Mission 18.0 and Mission 2000 boost sales?
Mission 18.0 aims to sell 1.8 million tons of lignite in monsoon 2024 (vs. 0.6 million in 2023). Mission 2000 targets expanding active customers to 2,000+ to drive volume growth.

Question 10: How does GMDC plan to leverage critical mineral policies?
GMDC is focusing on Rare Earths and multi-metal projects, aligning with national critical mineral strategies. Ambadongar Rare Earths and copper assets are key priorities, with updates expected in late FY25.