State-run coal behemoth Coal India has secured a graphite block, a critical mineral asset, in Madhya Pradesh. It would be the company’s first ever non-coal mineral mining venture.

Graphite has its utility as anode material in lithium-ion battery manufacturing due to its relatively low-cost and energy density.

“Coal India Limited has successfully opened its account in domestic critical mineral asset emerging as the preferred bidder for Khattali Chotti graphite block in Alirajpur district of Madhya Pradesh. This was under tranche two forward auction held on July 9 by the Ministry of Mines,” CIL said in a stock exchange filing on Monday.

CIL won the bid quoting a mining premium of 150.05 per cent of the value of mineral despatch, which it would pay to the State of Madhya Pradesh.

“CIL shall formally receive the letter of intent once it deposits performance security. Composite licence shall be issued to CIL in one year after the company meets the formalities under NIT timeline,” the company said.

The country’s Ministry of Mines had invited bids from potential bidders to participate in the tranche two mineral block auction where Coal India under its diversification portfolio won the bid. With this, the company is poised to play a supporting role in critical minerals domestically.

Based on five bed rock samples from the Khattali Chhoti block, the fixed carbon ranges from 1.99 per cent to 6.50 per cent. The total area of the block is nearly 600 hectares.

India imports about 69 per cent of its graphite needs - natural, synthetic and enduse products. Currently, the graphite mining industry has limited players and this offers space for willing players to venture into this business arena.

Graphite demand

With the electric vehicle market and energy storage systems fast gaining traction, where lithium-ion cells are used, graphite has a big market.

“Owning a graphite asset will give CIL an edge in powering green energy transition momentum to an extent. The company’s decades of mining experience is yet another advantage,” CIL said.

Market size for graphite is projected to take a big leap with the absolute demand projected to shoot up at the rate of 25 per cent to 27 per cent by FY35 from the current level.

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