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The Indian graphite industry - why we need to take notice

By Shruti Salwan
Published: Thursday, 27 November 2014

As companies battle to bring their graphite projects, IM looks at the possibilities emerging in India.

India is a major global producer of flake graphite. The country has been ranked amongst the top five graphite producers by the USGS, with reserves of nearly 11m tonnes. 

Graphite occurrences are reported from different states including Jammu and Kashmir, Arunachal Pradesh, Gujarat, Jharkhand, Maharashtra, Karnataka, Kerala, Tamil Nadu, Odisha, Chattisgarh and Rajasthan.  

However, the deposits of economic importance are located in Andhra Pradesh, Chattisgarh and Arunachal Pradesh, which are yet to be exploited. As far as mining and processing of graphite is concerned, Jharkhand, Odisha and Tamil Nadu are the only states where operations are being conducted.

Indian graphite resources

• Reserves - 10.75m tonnes

• Resources available - 158.02m tonnes

Table 4: Indian graphite industry - Operational reserves and available resources 2013

States

Graphite reserves

Andhra Pradesh

0.43

Arunachal Pradesh

72.75

Chattisgarh

1.01

Gujarat

3.35

Jammu & Kashmir

62.74

Jharkhand

10.37

Karnataka

0.26

Kerala

1.45

Maharashtra

1.16

Odisha

5.42

Rajasthan

1.91

Tamil Nadu

7.91


(*Quantity in tonnes)

Source: Geological Survey of India

Graphite resources 

Of the total graphite resources available in India, Arunachal Pradesh accounts for 43%; followed by Jammu & Kashmir (37%), Jharkhand (6%), Tamil Nadu (5%) and Odisha (3%) (Figure 1). 

However, in terms of reserves, Tamil Nadu holds the leading share of about 37%, followed by Jharkhand (30%) and Odisha (29%), as these are the only operational graphite spots (Figure 2). 

Figure 1: Total India graphite resources

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Figure 2: Operational Indian graphite resources

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Figure 3: Indian graphite producers

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Source: Geological Survey of India, IM Data

Graphite production 

Being one of the major producers of natural crystalline flake graphite, India registered production of 30,000 tonnes in 2013, down 14% from the previous year due to lower demand and the temporary closure of mines. 

The estimated production for 2014 is expected to be limited to 20,000-25,000 tonnes due to the lack of required infrastructure, energy resources, toughening government legislation and increasing environmental regulations. 

Out of the total production, eight principal producers including Tirupati Carbon & Graphite, Chotanagpur Graphite Industries, Carbon & Graphite Products, Agrawal Graphite Industries, Pradhan Industries, T.P. Minerals, G.R. Graphite and TAMIN Minerals account for nearly 85% of the total production, while the remaining 15% is contributed by other small miners (Figure 3). 

The illustrated map (Figure 4) highlights major graphite resources in India, operational mines and leading graphite producers in Jharkhand, Tamil Nadu and Odisha. 

Figure 4: Indian graphite map

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Current market scenario

India currently produces around 89 minerals under different groups, with fuel minerals, metallic minerals, non-metallic minerals, atomic minerals and minor minerals. The country has immense potential for mining resources and reserves and is currently among the top 10 global producers of many industrial minerals. 

Graphite is another major mineral produced in the country and, according to IM’s Natural Graphite 2012 Report, India is the fourth largest producer of graphite in the world. The country’s graphite production dropped by 15% to 30,000 tonnes last year and is likely to fall below the 25,000 tonne mark this year. 

This is mainly owing to toughening government regulations, increased judicial scrutiny and adverse mining conditions, which are not only restricting existing producers expansions but also keeping explorers at bay. 

According to market sources, the Indian graphite market is showing a downtrend since last year. Although the market is improving as industries move back into production, another downfall cannot be ruled out because of the recent orders passed by the Supreme Court of India which are going to negatively affect the sector (See table 6).

Many miners in the mineral-rich states of Jharkhand, Karnataka, Odisha and Tamil Nadu are struggling because of the bans imposed and increased judicial scrutiny. 

Table 5: Major graphite producers

Company

State

Mining Projects

Production Capacity

Tirupati Carbons & Chemicals

Jharkhand

Rabda, Gaura, Ekta

20,000 tpa

Chotanagpur Graphite Industries

Jharkhand

Satbarwa Bishrampur

10,000 tpa

Carbon & Graphite Products

Jharkhand

Latehar, Palamu

7,000 tpa

Agrawal Graphite Industries

Odisha

Belpara, Sambalpur

10,000 tpa

Pradhan Industries

Odisha

Rayagada

12000 tpa

T.P. Minerals Pvt. Ltd.

Odisha

Dangachacha, Sargipali

8,000 tpa

G.R. Graphite Industries

Odisha

Balibandha, Sambalpur

6,000 tpa

Tamil Nadu Minerals Limited

Tamil Nadu

Sivagangai, Madurai

8,400 tpa


Table 6: Major Challenges in the Indian Mining Industry

New Government

Although the new government aims to modernise its mining industry, the policies and procedures yet remain unclear. 

Environmental clearances

To obtain environmental clearance is mandatory, however the procedure is time consuming and the decision is mainly at the discretion of Supreme Court.

Social license to operate

Opposition from local landowners living near mining areas has made it even difficult to obtain a social licence.

Infrastructure access

Access to energy resources, transportation and skilled labour is limited.

Competition for land usage

Problems related to land usage for new mines amidst legal, environmental and social concerns.

Fraud and corruption

Lack of transparencies in policies is fuelling corrupt practices.

Regulations

Regulatory and policy framework is outdated.


Major developments

Overseas expansion

Amidst the prevailing industrial turmoil, it has become more difficult for existing miners or new players to invest in mining before they meet the required regulations. 

According to market sources new projects in India are substantially delayed when awaiting final clearances owing to increased regulation. In light of the current mining environment in India, it will be a while before new projects in India materialise.

Consequently, many producers have started looking for other feasible graphite resources available outside the country. Another major graphite producer of the country has acquired a 25km2 mine with large flake graphite deposits in Madagascar.

According to the company, detailed exploration in the delineated target area is in progress and considering the present timelines, the company expects to roll output of 12,000 tpa of large flake graphite from the project by Q4 2015.



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