GMDC records losses for first time, at Rs 40 crore

The company was incorporated in 1963 to develop major mineral resources in the state.  While its performance peaked in 2012-’13 with a profit of over Rs 600 crore, both profits and revenue tanked in the subsequent years.

In 2019-’20, the company reported a profit of Rs 145 crore, despite revenues from operations dipping by 19 per cent. The revenue from operations of the company has fell by 23 per cent between 2012-’13 and 2020-’21.

The MD said poor performance of its power plant and dipping production of key minerals such as lignite and bauxite took a toll on the company’s profitability. “Our production was constantly sliding for the past five years and we were not able to adapt our pricing to the dynamic market condition. So volume and revenue went down,” Singh added.

Lignite production of the company took the biggest hit after Panandaro mines in Kutch was closed and reserves got exhausted. The production that was over 100 lakh metric tonnes in 2012-’13 fell to 60 lakh metric tonne in 2020-’21. Lignite mining still continues to be the main operation of the company with GMDC operating five mines in Kutch, South Gujarat and Bhavnagar regions. Lignite sales of GMDC decreased nearly 13.6 per cent in 2020-’21, compared to 2019-’20.

Bauxite production and sales too fell in 2020-’21. The production of bauxite fell to 3.73 lakh metric tonne from 4.5 lakh metric tonne the previous year, the sales of the same mineral found in Kutch and Devbhumi Dwarka fell to 3.89 lakh metric tonne from 4.69 lakh metric tonne during the same period.

Despite the company clocking losses and revenues falling 12 per cent compared to 2019-’20, the remuneration of the then managing director Arunkumar Solanki (IAS) rose by five per cent to Rs 34,59,180 for the year 2020-’21.

The remuneration of chief general manager and chief financial officer L Kulshrestha rose by 23.78 per cent and that of company secretary Joel Evans increased by 21.79 per cent during 2020-’21.

In the annual report, the GMDC said it is looking at fresh mining leases to boost lignite production and also to enter the beneficiation with supplies of Silica Sand, Ball Clay and Bentonite. The company is also exploring for more manganese in Panchmahal and Vadodara districts and is scouting for rare earth minerals in Chhota Udepur.

“We are on recovery path. In terms of revenue our third quarter (2021-’22) was the best ever and our profitability was very good. We have continued to sustain that performance. The market has rewarded us by more than doubling our market capitalisation this year,” Singh added.