MOIL's Massive Upgrade: High-Speed Shaft & Ferro Manganese Facility Poised to Skyrocket Production!

MOIL Limited, India's largest manganese merchant miner, is undergoing significant operational enhancements aimed at boosting its production capacity and efficiency. Recent visits to its Balaghat and Malanjkhand (MCP) underground mines highlighted key developments, including an upcoming high-speed shaft project and a new ferro manganese facility.

High-Speed Shaft Project

The company is investing in a state-of-the-art high-speed shaft at its Balaghat operations. This new shaft is designed to reach depths of up to 750 meters, serving as a primary entry point from levels 15 to 27.5. It is projected to be approximately three times faster than the existing Holmes shaft, which has a current working depth of 436 meters. The commissioning and stabilization of this advanced shaft are expected within the next six months.

• The high-speed shaft will significantly improve access and operational speed at deeper levels.
• It is a crucial component for unlocking future resource potential.
• Benefits from higher volume are anticipated to accrue from the fiscal year 2027 (FY27).

Production Growth Outlook

MOIL has substantial resource reserves, with current reserves and resources (R&R) standing at 25.435 million tonnes across a total lease area of 259.489 hectares, supported by an Environmental Clearance (EC) for 650,500 tonnes annually.

• The mine currently yields ore with grades ranging between 25-48 per cent manganese.
• The company forecasts an ore volume exceeding 0.4 million tonnes in FY26.
• This volume is projected to surpass 0.55 million tonnes by FY28, indicating strong growth.

Expansion and Exploration Plans

Beyond the high-speed shaft, MOIL is pursuing further expansion through a prospecting license. This license covers an additional 202.501 hectares and involves approximately 10 million tonnes of additional R&R, currently under consideration by the DGM, Bhopal.

• The prospecting license signifies potential for significant future resource additions.
• Regulatory approval from DGM, Bhopal is pending.

Analyst Recommendation

Given the clear visibility of volume growth driven by the high-speed shaft and other expansion initiatives, analysts are optimistic about MOIL's prospects.

• A 'Buy' rating has been maintained on the stock.
• A price target (TP) of ₹425 has been set, reflecting confidence in the company's growth trajectory.

Impact

This development is expected to have a positive impact on MOIL Limited's financial performance by increasing operational efficiency and production volumes. For the Indian stock market, it reinforces confidence in the mining sector's growth potential. Investors can anticipate potential stock price appreciation if the company meets its production targets. The expansion aligns with India's focus on increasing domestic mineral production.

Impact Rating: 7/10

Difficult Terms Explained

• Underground (UG) mines: Mines where the ore is extracted from beneath the surface of the earth.
• High-speed shaft: A vertical tunnel constructed in a mine designed for rapid transport of personnel and materials, much faster than conventional shafts.
• Ferro manganese facility: A plant that produces ferroalloys, specifically ferro manganese, which is an alloy of iron and manganese used in steel production.
• Commissioned: The process of bringing a new project or facility into full operation.
• Stabilised: When a newly commissioned facility is running at its designed operational parameters and capacity.
• FY27: Fiscal Year 2027, typically running from April 1, 2026, to March 31, 2027.
• R&R: Reserves and Resources; estimates of the amount of mineral deposits available for extraction.
• EC: Environmental Clearance, a mandatory permit required before starting a project that may impact the environment.
• Prospecting licence: A licence granted to search for minerals in a specified area.
• DGM: Deputy General Manager, a senior official in administrative or regulatory bodies.
• Merchant miner: A mining company that sells its extracted minerals on the open market rather than using them for its own processing or manufacturing.
• TP: Target Price; the future stock price that an analyst or investor forecasts for a security.