VV Minerals boss says canalisation will hurt mineral sand miners

By William Clarke
Published: Tuesday, 26 February 2019

The chief executive of VV Minerals tells Fastmarkets that restrictions on private exports of mineral sands will be bad for production.

William Clarke and Sunder Singh

A ban on private exports of mineral sands from India will hit private production of titanium dioxide ores, zircon and garnet, the chief executive of Indian miner VV Minerals, S Vaikundarajan, has warned.

Vaikundarajan also downplayed the company’s legal dispute with the state of Tamil Nadu over allegations of illegal mining and the illegal export of monazite.

In comments made by Vaikundarajan to Fastmarkets in January 2019, he hit out against the country’s canalisation policy.

Having liberalised the mineral sands sector two decades earlier, the Indian government opted in August 2018 to canalise exports of mineral sands through state-run entity Indian Rare Earths Ltd (IREL).

"The new policy... is a blow to private companies like us," Vaikundarajan said. "We have made huge capital investments by way of technology and production facilities, and we have established significant share in global markets."

The tightening of regulation on the Indian mineral sand sector has sharply reduced the availability of ilmenite, rutile and zircon from that country.

Rival miner Kenmare said in January 2019 that Indian ilmetite supply had halved from 2017, when it accounted for around 7% of global market share.

The tightening could also threaten rutile supply, which is currently squeezed.

On February 14, Fastmarkets IM assessed the price of rutile concentrate min 95% TiO2 bulk CIF China at $1,050-1,100 per tonne, up from $850-950 per tonne a year earlier. 

A ban on private exports of these minerals from India would effectively put a stop to mining of these minerals, reducing their availability on the world stage, Vaikundarajan said.

"We should not forget that it was the private sector players, who helped the Indian mineral beach industry to achieve the current scales," he said, noting that production has boomed since the entry of private players into the mineral sand sector in 1998.

As a competitor to private firms, IREL has little incentive to encourage exports, Vaikundarajan said.

"Private producers like us have spent millions of dollars and more than 20 years in developing foreign clients," he said. "But the recent move by the government will nullify our efforts if the export of beach minerals continues to be through IREL."

S. Vaikundarajan receives an award from Commerce Minister Sudarsana Natchiappan.
VV Minerals 

Tax raids

VV Minerals is fighting legal cases relating to the alleged illegal mining of mineral sands, the alleged illegal export of monazite and a tax raid carried out by the national tax body late last year.

The state of Tamil Nadu, where VV Minerals operates, claims that the company is one several mineral sand companies that conduct illegal mining operations and the export of monazite - allegations that it refutes.

"Income tax raids are an unavoidable matter of life in India and are always conducted in the glare of tipped-off media exposure," Vaikundarajan told Fastmarkets in late January.

"It is not only business that is subject to these types of raids but it is also a regular feature of political life and, again, such raids are conducted in the full glare of the media which always seem to know in advance of the raids," he said. "For the media it is good copy and sells print and air time."

Vaikundarajan disputes local media reports that more than 85 million rupees ($1.2 million) in cash were seized in these raids, along with other assets.

"There were no assets seized except our computers are always taken away, copied and then returned," he said.

In total, he says, the authorities seized 34.8 million rupees, an amount that Vaikundarajan described as "not excessive" given the number of business units associated with VV Minerals as well as the fact that everyday business transactions in India are often conducted in cash.

Vaikundarajan also hit out at a report submitted to the Madras High Court in 2018 on the monazite content of mined but unsold mineral sands. He said the report used an outdated standard for measuring monazite content.

While the report "found stocks of tailings containing elevated amounts of monazite as expected in mineral sands operations worldwide, all were stored as required by the Atomic Energy Regulatory Board," Vaikundarajan said.

Monazite is a controlled material in India due to its thorium content. Thorium is used in India’s nuclear programme.