Frontline Volume 20 - Issue 06, March 15 - 28, 2003
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SPECIAL FEATURE: GUJARAT

The brown gold of Kutch

V.K. CHAKRAVARTI

By tapping the huge mineral deposits of the Kutch region, Gujarat Mineral Development Corporation Ltd. plans to turn the backward area into a prosperous one.

GUJARAT Mineral Development Corporation Ltd. (GMDC) produces 4.9 million tonnes per annum (tpa) of lignite and other minerals by mining the huge lignite deposits in the barren and backward district of Kutch. Set up in 1963, the GMDC is the country's largest lignite merchant and the second largest producer of the solid fuel, next only to Neyveli.

BY SPECIAL ARRANGEMENT

At one of the open-cast lignite mines in Kutch. The GMDC has introduced the latest mining technology and imported equipment worth Rs.100 crores.

The GMDC, which started operations with a small sand crushing plant near Surendranagar to meet the needs of the sodium silicate and glass industry for graded sand, is today a mid-size corporate house with an annual turnover of Rs.270 crores.

With the discovery of 11 million tonnes of fluorspar near Vadodara, GMDC set up a 500 tpa fluorspar plant at Kadipani in 1970, which is still functioning. Fluorspar, a rare mineral, found only in the Kutch region, has its use in the cement, pharmaceuticals, steel and defence industries. GMDC next decided to exploit copper, zinc and lead, discovered near Ambaji, and set up a concentration plant there.

In the 1970s, when solid fuels were in much demand, geological surveys in Gujarat revealed large deposits of high-grade lignite, a cheaper substitute for coal. The GMDC started mining lignite at Panandhro in 1974, and gradually in Surat, Rajpardi and other areas. Since the bulk of the lignite mines in Kutch are open cast, GMDC virtually struck `brown gold'.

The GMDC introduced the latest available mining technology from TAKARAF of Germany and imported machinery at a whopping cost of Rs.100 crores quite early in the day.

Lignite is widely used in the textiles and ceramics industries and lately in thermal power stations, as the 250 MW Gujarat Electricity Board (GEB) plant at Panandhro shows. Each deposit supported the regional needs of the fuel. Meanwhile, Gujarat Industrial Power Corporation Ltd (GIPCL) set up a 250 MW lignite-based power plant at Mangrol (south Gujarat). It proposes to double its capacity soon. Reliance Industries Ltd. too proposes to use lignite as one of the dual fuels in its new Ghogha plant near Bhavnagar.

With the ever-increasing demand for power, the GMDC took a strategic decision to set up a pithead lignite-based 250 MW thermal power station, based on the latest CFBC technology, saving on transporting and mining costs. It proposes to expand gradually its capacity by another 250 MW.

The annual consumption of lignite in different sectors is expected to grow from about 5.5 million tonnes at present to over 16.27 million tonnes per annum (mtpa) during the next few years. They are: power 9.77 mtpa, textiles 2.07 mtpa, chemicals 1.40 mtpa, ceramics 0.70 mtpa and others 1.50 mtpa. Besides lignite, the GMDC has plans to utilise about 3 million cubic metre of raw silica it handled annually, and also Wollastonite, ball and plastic clay.

Bauxite, another major mineral found in Kutch as both high-grade and low-grade, is being exported to West Asia at Rs.500 a tonne. Nearly 104 million tonnes of bauxite is found in Kutch, and the mineral is present in small quantities in Jamnagar and Kheda districts. The GMDC has also decided to set up a 750,000 tpa alumina plant.

The GMDC's profit before tax amounts to almost one-third of the company's total sales/income. The entire equity of the past and ongoing projects was raised through internal accrual. The GMDC has been paying up to a 50 per cent dividend to the State government, its promoter, ever since its inception. And it continued the practice even after it went public in October 1997, paying 40 to 45 per cent dividend to its 230,000 shareholders.

Although a public sector undertaking, the GMDC has been following wise management practices and observing strict financial discipline at every stage of production. It has come to the aid of people in distress, be they in cities such as Ahmedabad or in remote villages in the border areas, be it due to unprecedented earthquake or frequent cyclones or perpetual drought. The company considers that it owes the maximum to the people and the place where its stakes are the highest - in Lakhpat and adjoining Abdasa and Nalia taluks.

Its other project is to preserve the flora and fauna. For every tree the GMDC has to fell for mining operations, it plants 355 saplings. It has so far planted 700,000 saplings under a massive forestation drive in the low-rainfall region of Lakhpat.

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