The shares of one of the leading Mining stock specialising in the mining, manufacturing, and trading of minerals and their derivative products, jump 10 percent upon entering into a long-term Memorandum of Understanding (MOU) with China Railway.
Price action
With a market capitalization of Rs. 5,075.30 crores on Monday, the shares of Ashapura Minechem Ltd (NSE:ASHM) jumped 10 percent, making a high of Rs. 571.55 per share compared to its previous closing price of Rs. 519.60 per share.
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What Happened
Ashapura Minechem Limited specialising in the mining, manufacturing and trading of minerals and their derivative products through its overseas subsidiary has entered into a long-term Memorandum of Understanding (MOU) with China Railway.
The strategic partnership with China Railway, through a long-term Memorandum of Understanding, outlines a joint effort to develop Ashapura’s Fako bauxite deposit in the Kindia region of Guinea. Under the agreement, China Railway will handle bauxite production and logistics, while Ashapura will manage sales, marketing, and technical support, including quality assurance.
This project aims to create job opportunities in one of Guinea’s most underdeveloped regions, improve the company’s production capacity, and contribute to local economic growth and community welfare and improving lives of local communities in the Fako region.
Business Outlook
The company has successfully increased its bauxite sales from Guinea despite challenges, and all business segments, including Bentonite, Kaolin, and Bleaching Clay, have performed well in FY 2023-24. The company has signed long-term contracts for bauxite and iron ore supply. With a new port in Guinea, Ashapura expects a significant boost in bauxite exports in FY2024-25.
Financials
The company’s revenue rose by 5.1 percent from Rs 575.78 crore to Rs 605.25 crore in Q2FY24-25. Meanwhile, Net profit declined from Rs 59.33 crores to Rs 44.33 crore during the same period.
Written by Sridhar J
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