India’s mining sector continues to play a central role in the country’s industrial economy, supplying the raw materials that feed the metals, steel, energy, and infrastructure ecosystems. Over the past few years, this foundation has been strengthened by structural policy shifts that have steadily reshaped how the sector is organised, regulated, and financed.
A major part of this shift is the government’s National Critical Mineral Mission, announced with an outlay of nearly ₹163 billion. The mission seeks to secure long-term access to minerals essential to clean energy technologies, advanced manufacturing, defence equipment, and electronics. These sectors rely heavily on imports and have historically left India vulnerable.
Alongside this, national exploration programmes have expanded their focus to include critical minerals, with deeper geological surveys and accelerated block assessments becoming a priority across mineral-rich regions. The renewed attention is not limited to land-based reserves.
Offshore exploration is gaining traction as part of the country’s broader plans for a blue economy, opening up new avenues for mineral discovery in underexplored zones. Together, these initiatives reflect a gradual but firm movement toward building a more integrated mineral value chain.
On a similar note, this story discusses three such companies expanding capacity to meet the rising demand for the minerals they mine.
#1 IMFA: The ferrochrome giant doubling down on steel
Indian Metals & Ferro Alloys (IMFA) is India’s leading, fully integrated producer of ferrochrome. The company’s core business is mining chromite ore and producing ferrochrome, a crucial input in stainless steel production. It operates across the entire value chain, from captive chromite mining to captive power generation and ferrochrome smelting.
An integrated value chain
The company ensures a reliable supply of high-grade chromite ore from its two captive mines: Sukinda and Mahagiri. In FY25, the company achieved its highest-ever chrome ore production of 701,863 tonnes. It has a power generation capacity of 204.5 megawatts (MW) and 4.5 MWp of solar power.
This supports uninterrupted production and cost competitiveness, which is especially important for the power-intensive ferrochrome industry. In addition, IMFA operates two manufacturing complexes in Odisha: Therubali (Rayagada district) and Choudwar (Cuttack district). These complexes provide a combined smelting capacity of 284,000 metric tons per annum.
This integrated business model provides IMFA with operational stability, cost efficiency, and better margins than its non-integrated competitors. IMFA supplies ferrochrome to leading stainless steel producers across Asia, Europe, and other key markets. International sales accounted for 91.4% of sales.
IMFA is currently executing an ambitious expansion and diversification strategy.
Expanding ferrochrome capacity by 88%
A greenfield ferrochrome project is underway in Kalinganagar, Jajpur district. This expansion will add 100,000 tonnes per annum of capacity and is expected to be operational by mid-2026/H2 FY27. This will increase smelting capacity by 40% and is intended to meet demands from the rapidly growing domestic market.
Further, IMFA has agreed to acquire Tata Steel ferro-chrome plant at Kalinganagar, Odisha, for ₹6.1 billion. This will add 150,000 tonnes, bringing the total to 534,000 tonnes, including the existing 284,000 tonnes and the 100,000 tonnes from the greenfield project. This scale will make IMFA India the largest producer of ferrochrome and the sixth-largest globally.
The benefits of the acquisition are expected to begin in the next fiscal year, with overall output of 400,000 tonnes, rising to 475,000 tonnes in FY28 and beyond.
IMFA Capacity Expansion
Expansion into renewable power and ethanol segment
In addition, IMFA is pivoting towards hybrid renewable energy to reduce its carbon footprint. It has signed long-term Power Purchase Agreements totalling 110 MW of hybrid power (70 MW from JSW Green Energy and 40 MW from Ampin Energy Utility), with commissioning expected by June 2026.
IMFA is strategically diversifying into ethanol production, a sector boosted by the government’s fuel blending programme. A 120 KLPD (kilolitres per day) plant is being constructed at Therubali, Rayagada, which is expected to be commissioned in early 2026. Although this business has potential, its growth may be hampered by changing government rules and regulations.
Weaker revenue but strong profitability
From a financial perspective, revenue rose by 3.9% year-on-year to ₹7.2 billion in Q2FY26, while Profit after Tax (PAT) fell 21.6% to 980 million as operating margin fell by 600 basis points (bps) to 19%.
#2 Sandur Manganese: The strategic pivot from mining to manufacturing
Sandur Manganese operations are rooted in its core mining assets located in the Ballari District of Karnataka, alongside downstream manufacturing and energy capabilities. The company operates two mining leases in Sandur and is one of India’s leading merchant mining companies.
Scaling mining capacity to strengthen market position
The Maximum Permissible Annual Production (MPAP) limit has been increased from 1.60 million tonne Per Annum (MTPA) in FY23 to 3.81 MTPA in FY24, and further increased to 4.45 MTPA. This positions Sandur as the 3rd largest iron ore miner in Karnataka.
Additionally, the manganese ore MPAP limit has been increased from the original 0.28 MTPA to 0.46 MTPA, then to 0.58 MTPA, and finally to 0.599 MTPA. It is India’s second-largest manganese ore miner. Its biggest bet is the recent acquisition and consolidation of Arjas Steel.
This move accelerated Sandur’s forward integration, transitioning it from a merchant miner to a speciality steel manufacturer, specifically targeting the Special Bar Quality steel segment. The consolidation brought the steel manufacturing capacity to about 0.585 MTPA.
Sandur Manganese Expansion Plan
Synergies are already emerging, including direct iron ore supply from Sandur to Arjas’ Tadipatri facility, helping to stabilise procurement costs. Arjas commissioned a new Garret Coiler at its Tadipatri unit (with trial production underway), enabling it to expand its product mix beyond bars to include other speciality steel categories.
The Company continues to strengthen its ancillary segments (Ferroalloys and Coke & Energy) to bolster business resilience and support captive consumption goals. To address price volatility in coking coal, the Company executed a strategic shift by securing a conversion agreement. This agreement secures approximately 46% (or 45%) of its coke production capacity under contract, mitigating pricing risks and assuring steady production.
Earnings momentum strengthened by volume-led expansion
From a financial perspective, total income grew 336% year-on-year to ₹12.5 billion, led by manganese ore volume growth of 335%, ferroalloy volume growth (+137%) and steel volume growth of (+79%). EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) surged by 355% to ₹2.8 billion, and PAT increased by 334% to ₹1.4 billion.
#3 Ashapura Minechem: The “guinea” bauxite super-play
AshaPura Minechem operations involve mining, manufacturing, and trading of various minerals and their derivatives, as well as providing related products and services. Its business is primarily split between India and international markets, particularly Guinea. Its business encompasses a wide range of minerals, including Bauxite, Bentonite, Kaolin, Bleaching Clay, Silica and Iron ore.
Bauxite capacity to jump fivefold by FY28
The Bauxite business in Guinea is a key pillar of the company’s global growth. It’s due to strong demand for bauxite in the aluminium sector, driven by the clean energy transition. The shift in global supply has favoured Guinea, as traditional exporters like Indonesia have banned bauxite exports, Australia has reduced volumes, and India’s exports have faced high duties.
This makes Guinea a crucial source, possessing the largest bauxite reserves globally (estimated at 30 billion tonnes of proven reserves). It has set a clear long-term objective of achieving a bauxite export volume of 15 million metric tonnes (MMT) by FY28, up from roughly 3 MMT in FY25. Manufacturing & Mining activities account for over 92% of the entity’s turnover.
Beyond Bauxite, the company’s iron ore business in Guinea has started trial production under a long-term sale-and-purchase agreement with a local beneficiation plant. This segment is expected to reach commercialisation within the next two quarters.
The company reported exports of 3.38 MMT in the first half of FY26, almost equal to the full-year volume of FY25. Ashapura is also expanding its port-handling capacity from 16 MMT to 27 MMT, with completion expected in Q2 of FY27. To support increased throughput, it has constructed 3 ports and constructed over 370 km of road network from mines to ports.
Indian capacity running at peak utilisation
The Indian business is focused on increasing profits through capacity utilisation, value-added products, and efficiency. Production has commenced at two new bentonite mines in Kutch, with an estimated annual output of 300,000 tons. This increase is expected to improve the cost structure and sales potential for this segment.
The Kaolin plant at Paddhar is currently operating near its full capacity due to strong export demand, especially in the paint and fibreglass segments. The company is actively evaluating capacity expansion options for its higher-value product lines within the same facility in the near future. The bleaching clay capacity is also running at full capacity.
Ashapura has also signed a long-term agreement with China Railway to collaborate on mining, infrastructure, and logistics operations in Guinea. The company also has a long-term agreement for marine logistics, barging, and ocean-going vessels through 2026 to alleviate previous difficulties related to vessel arrangements and freight transportation.
Record financial performance
From a financial perspective, revenue in the second quarter rose by 57.6% year-on-year to ₹9.5 billion, driven by increased Bauxite volume. EBITDA doubled to ₹1.3 billion, up from ₹653 million, while margin expanded by 310 bps to 13.9%. Strong EBITDA growth was supported by improved cost efficiency and higher operating leverage. PAT increased 146% to ₹1.1 billion.
Valuations remain moderately positioned
Despite being capital-intensive and constantly expanding capacity, all three companies have strong return ratios, including return on capital employed (ROCE) and return on equity (ROE). This reflects their strong profitability and efficient capacity utilisation.
Valuation assessment (X)
| Company | EV/EBITDA | 5-Year Median | Industry | RoE (%) | RoCE (%) |
| IMFA | 14.9 | 5.5 | 10.3 | 17.0 | 21.3 |
| Sandur | 9.9 | 15.8 | 6.9 | 18.6 | 20.8 |
| Ashapura | 11.8 | 10.5 | 8.8 | 27.1 | 18.6 |
In terms of valuation, IMFA trades at a significant premium to both its median and industry multiples after the recent rerating. Sandur trades at a discount to its multiple but at a premium to the industry. Ashapura also trades almost in line with both median and industry valuations.
Disclaimer
Note: Throughout this article, we have relied on data from http://www.Screener.in and the company’s investor presentation. Only in cases where the data was not available have we used an alternate but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.
A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.
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