Monolithisch India Limited has secured a quartzite stone mining block in Bihar for ₹157 crore, giving the silica ramming mass maker access to up to 35.5 lakh tonnes of approved mining capacity over the next five years. The company said the strategic backward integration is expected to significantly lower raw material procurement costs and strengthen margins as it ramps up manufacturing capacity.
The block, located in Nawada district, was secured through an e-auction conducted by the Mines and Geology Department of the Bihar government. It carries an approved mining capacity of 7.10 lakh tonnes per annum, or 35.50 lakh tonnes over the five-year allotment period.
The development comes as Monolithisch expands its silica ramming mass business, with consolidated group manufacturing capacity expected to reach 5.76 lakh tonnes per annum. The company said securing a captive source of quartzite will provide greater visibility over raw material availability and prices as the new capacity comes on stream.
Captive quartzite to lower procurement costs
The quartzite block could yield up to 7.10 lakh tonnes of ore annually, subject to mining and statutory conditions. Monolithisch has not disclosed the expected recovery or beneficiation yield from the mined ore. However, the approved capacity represents a substantial captive raw material base compared with its planned 5.76 lakh tonnes per annum manufacturing capacity.
The company expects the integration to reduce raw material procurement costs significantly once mining begins. It also expects to reduce the amount of raw material held at its manufacturing facilities, potentially releasing working capital and reducing its exposure to fluctuations in externally sourced raw material prices.
The company said the ore from this block is known for its quality and consistency and has historically been sought after by secondary steel clusters. It expects access to a consistent ore source to improve product quality while supporting the development of new products based on different ore grades.
Operations likely from February-March 2027
Commercial mining operations are expected to commence in February-March 2027, subject to statutory approvals and clearances. The company currently expects the required approvals to be obtained within around three to four months, depending on regulatory processes.
Rather than making significant upfront investments in mining infrastructure, Monolithisch plans to outsource mining activities through per-tonne raising contracts to experienced national mining contractors. This approach is expected to limit direct capital expenditure associated with the mining operation.
The company will separately establish a beneficiation and storage unit near the block. The facility will be used to process and store the ore, maintain quality consistency and support research and development for new products.
₹157 crore payment spread over five years
The ₹157 crore consideration will be paid in multiple tranches over the five-year tenure in accordance with state government guidelines. Monolithisch said it is targeting a 50% reduction in raw material inventory in H2FY27, with the aim of maintaining a near debt-free balance sheet while meeting the mining-related payment commitments.
The company plans to fund the scheduled payments primarily through internal accruals, with limited reliance on cash-credit facilities.
Backward integration coincides with capacity expansion
The mining allotment is particularly significant for Monolithisch because it coincides with the expected commissioning of its greenfield project. Management believes the availability of captive raw material could help the new facility achieve optimum capacity utilisation ahead of schedule.
Harsh Tekriwal, Managing Director, Monolithisch India, said the company had completed its backward integration with surplus raw material capacity, adding that the move would strengthen its competitiveness on both quality and cost.
The company also indicated that the Bihar mining block could be the first of several such initiatives, with plans to secure raw materials before entering additional product verticals.