Coal India Shares See Best Intraday Gains In A Month On Rare Earth Deal
Shares of Coal India rose as much as 1.76% to ₹389 in morning trade on Tuesday after it signed an agreement to explore critical minerals.
Post-market hours on Monday, Coal India announced that it signed a non-binding memorandum of understanding (MoU) with Chhattisgarh Mineral Development Corp. (CMDC), to partner in the exploration & exploitation of critical minerals and other minerals of mutual interest.
This comes after Coal India was declared the preferred bidder for the Ontillu-Chandragiri Rare Earth Element (REE) Exploration Block in Andhra Pradesh. The block covers an area of 209.62 square kilometres.
Why is a robust domestic rare earth supply chain important?
India aims to reduce its dependence on Chinese exports, as it currently imports nearly 90% of its rare earth magnets from its neighbor.
In April, China announced export controls on a broad range of rare earths and related magnets as a response to US President Donald Trump’s broader tariffs on goods. The decision disrupted global supply chains that are vital to automakers, aerospace firms, semiconductor manufacturers, and military contractors.
According to reports from last month, India is exploring alternative sources of rare earths and has turned to the Myanmar-based rebel group, the Kachin Independence Army (KIA), to obtain samples of rare-earth ores.
Stock Watch
Coal India’s stock has been under selling pressure lately, gaining in just two of the last 10 sessions. The stock has recorded its highest intra-day percentage jump in over a month.
Retail sentiment on Stocktwits shifted to ‘neutral’ last week from ‘bearish’.
Year-to-date, the company has gained a marginal 0.6%.
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