Rare Earth Stocks: The demand for rare earth elements is increasing rapidly in India. The biggest reason for this is electric vehicles and clean energy sector. 19.6 lakh EVs were registered in India during the last financial year. This is 17% more than a year ago.
Rare earth materials play an important role in EV motors, battery systems and charging infrastructure. At the same time, renewable energy projects like wind turbines require high performance magnets, which depend on rare earths.
Let us know why the government is increasing focus on rare earth minerals and which three companies are associated with this sector.
Rs 72.8 billion program
According to Reuters report, the Government of India has approved a Rare Earth Permanent Magnet Manufacturing Program worth Rs 72.8 billion. Its objective is to reduce dependence on imports for critical elements that are used in sectors like EV, aerospace, defense and renewable energy. At the policy level, this is a clear indication that India wants to strengthen this sector strategically.
For this reason, stocks of companies related to rare earths or looking for opportunities related to them have started coming on the radar of investors. At present, there is no listed company in India which focuses only on rare earths. But, some companies are associated with this sector.
- Owais Metal and Mineral Processing
Owais Metal and Mineral Processing works in the field of metals and minerals. The company is involved in recycling of rare earth minerals from manganese oxide, ferro manganese, wood charcoal, quartz slabs and slag. For this the company uses its proprietary technology. The rare earth products produced from here are used in electronics, semiconductor, defense and capacitor industries.
Owais Metal stock closed at Rs 248.25 on Friday, January 24, down 4.94%. Which is about 73% below its 52 week high. The company launched the IPO in February 2024 at an issue price of Rs 87. The 52 week high of this stock is Rs 942.2 and the 52 week low is Rs 200.10.
The main strength of government company NLC India is lignite mining and associated thermal power generation. The company operates large lignite mines and pit-head power plants in Neyveli in Tamil Nadu and Barsingsar in Rajasthan.
According to PTI reports, the company has started preliminary talks for lithium blocks in Mali, West Africa, and copper and cobalt mines in the Republic of Congo. According to the company’s CMD Prasanna Kumar Motupalli, the Ministry of Mines and Coal has clearly told the Navratna PSU to aggressively pursue exploration and mining of critical minerals and rare earth elements.
Shares of NLC India had closed at Rs 247 with a decline of 0.76% on Friday. It is about 15% below its 52-week high. The 52 week high of this stock has been Rs 292.35 and the 52 week low has been Rs 185.85.
Eco Recycling is a well-known e-waste management company. It provides services such as asset removal, inventory control, packing, reverse logistics, data destruction, asset recovery and recycling. The company is preparing to open a mineral recovery facility that will focus on metal recovery from PCBs, hard drives and lithium-ion batteries. This will increase domestic supply of precious metals like cobalt, nickel and manganese and reduce dependence on imports.
Going forward, the company plans to focus more on value-added segments such as precious metal recovery, IT asset disposition, data destruction, lamp recycling and refurbishment. Participation in these areas under the EPR framework is continuously increasing.
Eco Recycling shares closed at Rs 455, up 1.96%. It is about 55% below its 52 week high. The 52 week high of this stock has been Rs 998 and the 52 week low has been Rs 416.20.
These shares are the top choice of Sudeep Shah of SBI Securities for the new week, further decline in Nifty 50 is expected
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