New Delhi, Oct. 23 -- The Mines Ministry has sent a proposal to the Department of Investment and Public Asset Management (DIPAM) for its concurrence to convert KABIL, a joint venture among three state-run enterprises, NALCO, HCL, and MECL, into a NALCO subsidiary by increasing its stake to 60% from 40% now. The other two partners, HCL and MECL, will still hold 35% and 5% stakes, respectively.

Currently, NALCO, HCL and MECL hold stakes in the ratio of 40:30:30 in Khanij Bidesh India Limited (KABIL). In FY26, NALCO's revenue was Rs 17,843 crore and HCL's Rs 3,078 crore. MECL clocked Rs 385 crore revenue in FY25.

The restructuring plan, already approved by the respective boards, aims to strengthen KABIL's financial and operational capabilities to support its expanded mandate under the National Critical Mineral Mission, which targets acquiring 26 mines abroad by PSUs within FY31. KABIL was incorporated in 2019to source critical raw materials from overseas for the domestic market and achieve the country's mineral security.

"The Committee have been informed that the transition is expected to address KABIL's existing constraints in raising capital, as NALCO would be in a position to extend financial support, facilitate access to institutional finance and provide the necessary guarantees for securing loans from banks and other financial institutions," a Parliamentary standing committee, headed by BJP MP Anurag Singh Thakur,noted in a report.

The revised structure would also enable KABIL to draw upon NALCO's technical and managerial manpower to augment its execution capabilities. NITI Aayog also underscored the need to significantly strengthen KABIL's institutional capacity in financial resources, qualified manpower, and project execution capabilities.

The committee, however, while hailing the move, cautioned that the change in ownership structure alone may not be sufficient to enable KABIL to compete effectively in the highly competitive global critical mineral sector. KABIL does not have any internal accruals or reserves. KABIL reported a cumulative loss of Rs 16.61 crore over the last three fiscal years.

On the other hand, KABIL has a significant capital outgo in the coming years. It has five lithium blocks allotted in Argentina. While KABIL has completed non-invasive exploration in these blocks, it has committed toinvesting$25.71 million tocomplete the exploration activities. KABIL is also exploring other overseas lithium and REE projects. It is also exploring another nine lithium blocks in Argentina. It is also exploring opportunities for acquisition of overseas critical minerals assets like Lithium (Li) and Cobalt (Co) in Australia and Chile.

The need for restructuring arose because KABIL needed to double its authorised capital to Rs 1,000 crore. However, MECL's net worth and investment capacity are limited. As per government guidelines, Miniratna companies like MECL can invest up to 15% of their net worth to establish joint venture companies and subsidiaries.

Published by HT Digital Content Services with permission from Millennium Post.