Fueling growth

Roopwant Singh assumed control of Gujarat Mineral Development Corporation (GMDC) at what he describes as a ‘watershed moment’.

The public sector enterprise, which had been a powerhouse in energy minerals such as lignite and industrial metals like fluorspar and bauxite for almost six decades, was going through an uncharacteristically tough time.

“The company was registering its first ever loss in its 60-year history,” Singh recalls. “It was slightly overwhelming. Even though I wasn’t responsible, the burden was on my shoulders. That is how I started.”

That was three years ago. In the short time since, the picture has entirely changed and the outlook for the organization is once again looking bright. Indeed in the space of a year, Singh took the business from a negative to a positive of US$89.2 million. More recently, the company reported profits of US$202 million in the 2023 financial year.

“While these were the numbers for production and value realization, during my initial three-to-six months, I realized there was a lot of talent that had been pushed to the corners of the organization,” he says.

“So I believe my biggest contribution then and now has been selecting the right people for the right job. We put the right people in place. It was a time to capture value.”

So how did Singh bring about this dramatic turnaround? He credits his success in large part to GMDC’s firm foundations.

“The company was in a crisis, and yes, it had losses, but I inherited a very fine company,” he says. “If it wants to get anything done, it is able to get it done. Many enterprises are not able to do this.”

The support of the board was also crucial, according to Singh. “They asked us to evaluate this crisis comprehensively and get external advice on taking this forward,” he recalls.

This included tackling issues with the power plant, which was behind much of the losses.

What followed was a three-month period of evaluation and learning, after which Singh felt fully equipped to take action.

“The year 2021 was the post-pandemic rebound, so commodities were doing well,” he reflects. “We corrected prices, we onboarded customers, we were fairer to them.”

Production surged by 40 percent and the company worked to correct the disparity between the cost of production and sales. “They were totally out of sync with each other,” he reveals.

The year also saw Singh and his team engage with strategic advisors who could help them continue with this transformation. “The bigger journey started thereafter. That is how it all began,” he says.

Planning for the future

GMDC had previously prided itself on having zero debt, but Singh points out that while some may have seen this as a virtue, the reality was that it meant the company could not progress.

“Since it is a listed organization, there has to be healthy debt. But a debt will come only when you have plans,” he explains. “The organization that I walked into had no plans. Having plans for the future is a slightly optimistic thing. It didn’t even have plans for its present, for its problems or anything. There were no plans.

“If you don’t have any plans, you’ll take pride in saying it’s a zero debt company. That’s the only thing you can do.”

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Now, the company has plans aplenty.

“Three years on, we have a plan to quadruple our revenues,” Singh explains. “Profitability will also quadruple. There will be a significant index of roughly US$2 billion spread over the next six years. This will fuel growth for the company.”

This next phase will be planned along three key business streams, he adds. Lignite coal operations, the backbone of the company, will be expanded in order to replenish GMDC’s depleted reserves. Thermal coal is another focus, as are critical minerals.

“Coal may not be very fashionable, but that is what the company does well,” Singh says. “We’ll continue to generate resources from what we do well, and will pump all those resources into minerals and the future of the company.”

While the majority of GMDC’s revenues currently come from five lignite projects, Singh reveals there are plans to add six additional lignite projects, with further projects in gold, rare earth elements, copper, expansions of a thermal project and a fluorspar project – 14 in total.

“This is unprecedented. By the end of this financial year we hope to see many of the critical decisions getting through,” he confirms.

Such ambitious strategies require a significant debt, particularly when processing plants are added to the mix, but Singh says his bureaucratic roots will ensure costs don’t spiral.

Indeed, his background as a regulator in the mining sector has been an invaluable tool, although he admits that it gave him a different perspective to many of his colleagues, which has made the first three years a steep learning curve.

‘I walked in with the right awareness but the wrong attitude,” he reflects. “Instead of checking and saying no, you essentially have to look at the possibilities and say yes.”

A strategy for growth

Putting these plans into action won’t be easy, however, as Singh is well aware. He identifies one of the biggest challenges ahead of GMDC going forward as its need to build a bigger team.

“We would need three times more people than what we have today,” he says. “We’re talking quality labor, progressively built, which we need to do by the end of the decade.”

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“GMDC is a pioneering company in lignite mining. Working closely with GMDC, you understand how agile, flexible and balanced its approach is toward any project it undertakes. Right from the top, positivity permeates down the line and we feel we all are aligned to its larger picture. GMDC truly creates an ecosystem where a spirit of inclusiveness and excellence is nurtured.” – Ratul Chakravorty, Executive Director, Mecgale Pneumatics

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Another area the company must tackle is digitization as it strives for excellence. Although it was an early adopter of technology, Singh predicts it will play an increasingly important role in its future.

“Digitization will help us source value in our entire course of operations as we grow,” he says.

This journey is already underway, with GMDC’s largest mine in Kutch featuring three types of sensors – tracker sensors, activity sensors and fuel sensors – designed to enhance the efficiency of its mining fleet. Its Bhavnagar mine features digital fleet monitoring.

It’s an evolution that will gather force, with the company outlining a vision to develop an IT system to support gross calorific value-based pricing, part of its mission to stop underselling its products, as more projects are rolled out. Older projects will be slightly trickier to bring up to speed on this front due to contractual obligations and the like, he admits.

A focus on quality is also part of the strategy. “The customers that we have currently buy on quality – we sell on volume. We want to change that,” Singh points out.

“Quality is something that will be challenged and counter-challenged, so we want to build in internal data and certification so that when we roll it out, it stands the test, it stands its ground.”

This is how Singh plans to distinguish GDMC from its competition. “We will be on par with the best mining player within the country,” he says. “And I hope these efforts bear fruit earlier rather than later.”

Singh’s experience with GMDC has highlighted the importance of bringing external voices into the picture to move things forward. “These can be experts or consultants – otherwise the ship will not budge,” he says.

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It has also emphasized the importance of looking within the company’s own ranks to discover employees who could take on new roles. “This is your task, to find them and put them in the right job,” he says.

The third gem of wisdom he is keen to share is that leaders should seek out the biggest problems within their organizations.

“Don’t avoid them. Touch on them straight away. Otherwise, if you wait a year or six months, or wait until two years have passed, then you will have lost critical momentum and it won’t be resolved.”

Momentum is certainly not something GMDC is lacking with Singh at its helm. “I want us to differentiate ourselves,” he concludes. “So that is a goal that we have laid a path toward.”