The Union Budget 2024 announced several measures that are positive for various metal and mining companies.
Key measures include the introduction of the critical mineral mission, the removal of basic customs duties, and higher allocations for infrastructure.
Here are all the key measures, and which metals and mining company stand to benefit from them:
Critical Mineral Mission
Finance Minister Nirmala Sitharaman announced on Tuesday that the government will be setting up a Critical Mineral Mission for domestic production, recycling, and overseas acquisition of critical mineral assets.
This move is positive for metals like aluminium, lithium, cobalt, and opper. The mission could benefit not only recyclers like Gravita India Ltd., but also miners like NMDC Ltd. and Coal India Ltd., which focus on critical mineral blocks.
Custom Duties
Highlighting steel and copper as important raw materials for India, the 2024 budget proposes to remove the basic customs duty of 2.5% on ferro nickel. The government also removed the 5% customs duty on blister copper. The Finance Minister will also continue with the zero duty on ferrous scrap and nickel cathode.
The budget also announced that customs duties on steel scrap would be removed. This could encourage steel producers to set up more green steel capacities, where steel scraps play a crucial role, particularly in the electric arc furnace method, which is a key green steel production process.
The removal of the above-mentioned duties could mainly benefit large steel producers like Steel Authority of India Ltd., Tata Steel Ltd., JSW Steel Ltd. and Jindal Steel Power Ltd.
Thermal Power Plants
The budget also announced that the development of indigenous technology for Advanced Ultra Super Critical thermal power plants that have higher efficiency has been completed.
This was underpinned by the announcement of a joint venture between NTPC and Bharat Heavy Electricals, which will be setting up a full-scale 800 MW commercial plant using the same technology. This is an indication of the expected higher thermal power demand, which could lead to a higher thermal coal demand. This benefits Coal India Ltd.
Higher Capex
Finally, the 11% increase in capital expenditure towards infrastructure spending is positive for metal companies because it could drive higher demand for steel used in construction.
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