Indian Mining: Strategic Bets on Jharkhand's Critical Minerals and Accelerated Corporate Diversification

Period: 2026-01-19 — 2026-01-25 | Sources analyzed: 16 | Avg. relevance: 7.7/10

Bottom Line

Investors should actively position themselves in Jharkhand-focused mining firms and public sector undertakings (PSUs) like NMDC, which are expanding their portfolios into coal and critical minerals. Concurrently, a review of mineral-based exporters is necessary to assess the impact of the European Union's termination of the Generalized System of Preferences (GSP) benefits.

Key Developments

1. NMDC Commences Operations at Tokisud North Coal Mine in Jharkhand — On January 23, 2026, NMDC initiated mining at this coal mine in the Hazaribagh district, marking a significant phase in the company's strategic diversification beyond iron ore. Portfolio implication: Consider additional stock selection in NMDC for long-term upside. This move will enhance revenue stability and provide the company with a strategic foothold in the coal market. Monitor consolidation/diversification potential in other public sector mining majors (e.g., Coal India).

2. Jharkhand Government Promotes Critical Mineral Wealth Globally in London — A state delegation presented reserves of 20 critical minerals, including graphite, nickel, cobalt, lithium, and rare earth elements, to global investors at a high-level meeting held in London. Portfolio implication: Identify companies engaged in critical mineral leases (mining leases) in Jharkhand and prepare for investment. The state's announcement of investor-friendly policies will directly impact the valuation and future revenue of these firms.

3. Revised Power Policy 2025 Strengthens Coal Allocation and Energy Security — 13.32 GW of new coal-based power capacity has been allocated for FY 2025-26, bringing the country's total coal capacity to 226.23 GW. Portfolio implication: Consider investments in coal mining equipment manufacturers (e.g., BEML, Caterpillar's Indian partners) and coal logistics companies. The new capacity implies sustained growth in coal demand and mining activities.

4. EU Terminates Tax Exemptions for 87% of India's Exports — Effective January 1, 2026, the European Union has terminated the Generalized System of Preferences (GSP) for India, increasing import duties on 87% of Indian exports, including mineral products. Portfolio implication: Conduct an immediate review of the profitability of mineral-processing companies with significant exports to Europe (e.g., steel, alumina exporters). Although the government claims the impact is only 2.66%, the effect on specific companies could be more pronounced. Expect potential short-term volatility in these companies' shares.

5. India Aims for Regional Leadership in Critical Mineral Recycling — The government is developing a comprehensive strategy focused on enhancing the recovery of minerals like lithium, cobalt, and rare earth elements. Portfolio implication: Seek long-term growth opportunities in companies engaged in electric vehicle battery recycling and electronic waste management. This strategy will reduce dependence on traditional mining and create new incentives for investment in recycling technology.

Sector Pulse

Risk Watch

• EU Trade Adverse Shock — The termination of GSP benefits may reduce the competitiveness of mineral-based exporters and compress profit margins.
  • Probability: Medium
  • Impact: Medium
• Increasing Regulatory Pressure on Illegal Mining — Surveillance via ANPR cameras in Bihar and the Supreme Court's expression of concern over illegal mining in the Aravallis could cause delays in mining projects and increase operational costs.
  • Probability: High
  • Impact: Medium
• State-Level Policy Instability — Changes in the allocation methods for minor mineral leases in states like Chhattisgarh could create uncertainty for local mining companies.
  • Probability: Medium
  • Impact: Low-Medium

Outlook

Key events and indicators to monitor next week:

• Release of detailed investor-friendly policy proposals for critical minerals by the Jharkhand government.
• Initial production figures and estimated financial impact from NMDC's Tokisud North coal mine.
• Quarterly earnings announcements from major mineral companies exporting to the EU, reflecting the impact of GSP termination.

Positioning consideration: It is advisable to maintain an overweight stance in mid- and large-cap stocks with a strong presence in Jharkhand and a focus on critical minerals/coal diversification, while reducing exposure to pure-play EU exporters.