The race for critical minerals has become one of the biggest investment themes of this decade.

Countries are scrambling to secure supplies of lithium, rare earth elements, graphite, nickel, and other strategic minerals that power everything from electric vehicles and renewable energy projects to semiconductors and defence equipment. Without these minerals, the world's energy transition slows down.

India doesn't have abundant reserves of many of these resources. But that isn't stopping the country from building its own critical minerals ecosystem.

Mining companies are expanding into strategic assets, metal producers are diversifying beyond their traditional businesses, and government-backed initiatives are encouraging domestic exploration as well as overseas acquisitions.

For investors, this shift is creating opportunities that extend well beyond the usual mining names. Some listed companies are making calculated bets that could shape their growth trajectory over the next decade.

Here, we look at four critical mineral stocks that are not only participating in this structural trend but also have ambitious expansion plans that investors should keep an eye on.

#1 Midwest

Set up in 1981, Midwest along with its subsidiaries and JVs is engaged in quarrying, extraction, processing and trading of natural stones (granite and slabs). It also manufactures diamond wires.

It's India's largest producer and exporter of this granite, reaching 17 countries across 5 continents.

What gives it an edge from competitors is the technology. The company has employed the latest technology and mechanised processes for the development and extraction of stone from the mines to have better recovery rates of the stone.

Furthermore, its vast network of distributors developed over the years, and its association with key players in both the domestic and export markets continues to support growth.

The company’s sales and net profit have grown at a compounded annual rate (CAGR) of 20% and 52%, respectively, over the past 5 years.

During the same period, its return on equity (ROE) and return on capital employed (ROCE) have averaged 19% and 25%.

Going forward, Midwest is moving beyond granite into the high-stakes world of quartz and rare earth materials. This positions it to solve a massive import headache for India.

Take solar glass, for instance that is used in solar panels, and is growing at 30% CAGR. India currently imports 65% of its requirements. Midwest aims to cater to around 11-13% of the raw material needs of this growing industry.

Under phase 2 of its expansion, it aims to produce ultra-high-purity quartz for use in semiconductors.

Midwest plans to enter heavy mineral sand mining and titanium slag production, while also exploring the extraction of minerals used in advanced ceramics and LED industries.

It has secured four exploration licenses in Sri Lanka for heavy mineral sand mining, with commercial operations targeted for FY27. One of these minerals - Monazite - is key raw material for rare earth elements used in aerospace, defence, chemicals, EVs, electronics, medical devices etc.

It has even signed an MoU with KMML (Kerala Minerals and Metals) to process these raw materials into high-value oxides.

By FY27, the management hopes to be a global name in titanium feedstock and rare earth oxides, serving everything from aerospace to medical devices. It is aiming to grow revenue 2.5 times over the next 2-3 years, and 3 times profitability in the next 3-4 years.

#2 Sterling Tools

The company is India's second-largest manufacturer of high-tensile cold-forged fasteners, primarily serving the automobile industry.

Its business is marked by diversification across segments and customers. It supplies to leading Indian automotive OEMs, with products used in both automotive and non-automotive applications.

As the company specialises in precision-engineered, cold-forged, high-tensile fasteners used across vehicles, it's a proxy play to the rare earth theme.

EV battery packs, thermal modules, and high-reliability joints require specialised fasteners. Sterling earns 42% of revenue from this segment.

In May 2025, Sterling Tools, through its subsidiary Sterling Gtake E-Mobility (SGEM), announced its entry into the manufacturing and marketing of rare-earth magnet-free traction motors for EVs. It has also expanded into drivetrain components for EVs.

The company entered into a technology licensing agreement with UK-based Advanced Electric Machines (AEM) to produce these motors at its Faridabad facility in Haryana. All this shows that in the coming years, the company could become an established player in the rare earth space.

Sterling Tools has grown its revenue and net profit at a CAGR of 23% and 13%, respectively, over the past 5 years.

Its ROE and ROCE have averaged 10% and 14%, respectively, during the same period.

Going forward, new customer homologations in the e3W and e-bus segments, along with product additions such as traction motors and on-board and off-board chargers are expected to support its volume growth.

While the company’s limited product diversification has been a constraint in the past, its ongoing efforts to expand its EV portfolio are expected to support growth.

#3 GMDC

This company is at the forefront of India’s critical minerals race. It’s also India's second-largest lignite-producing company and the No. 1 lignite merchant seller in the country.

A government-owned mining player, GMDC has recently pivoted from lignite to a critical rare earth minerals player.

In the critical minerals space, GMDC is developing one of the world's largest, rare earth deposits at Ambadungar.

This processing hub will integrate the entire rare earth value chain and enable downstream manufacturing across industries such as metals and alloys, NdFeB magnets, electric motors, glass, and optical glass.

Its rare earth portfolio includes key light rare earth elements such as neodymium, praseodymium, cerium, lanthanum, among others.

Most of the critical minerals it will process are critical for clean energy, electric mobility, and advanced technology applications, strengthening India's domestic critical mineral supply chain.

The company’s sales and net profit have grown at a CAGR of 16% and 37%, respectively, over the past five years.

Its ROE and ROCE have averaged 10% and 13% during the same period.

With an investment plan of ₹3,000-4,000 crore, GMDC is aiming to build an entire ecosystem from mining to refining. If executed well, this could be a big inflection point for the company.

Over the next few years, it could see a meaningful transformation, but the outcome depends heavily on execution. The Odisha Baitarani-West coal block can significantly scale revenues and shift GMDC from a lignite-focused player to a national coal producer.

Simultaneously, entry into rare earths and critical minerals, backed by government incentives, offers an opportunity if monetised successfully.

#4 NALCO

NALCO is a navratna Central Public Sector Enterprise (CPSE) under the ministry of mines.

The company is engaged in the manufacturing and sale of alumina and aluminium. In its recent earnings call, the company mentioned it’s exploring the extraction of critical minerals, particularly from alumina red mud and Bayer's liquor.

It has signed an MoU with a private company based in Chennai. The partner has installed a reactor at NALCO's site and has begun testing red mud samples. Experimental work is currently underway, with results expected in due course.

It has also signed an MoU with Bhabha Atomic Research Centre (BARC) to set up a pilot plant for the extraction of gallium from Bayer's liquor, further expanding its critical mineral recovery efforts.

It’s participating in overseas critical mineral exploration via Khanij Bidesh India (KABIL), a JV between Hindustan Copper (HCL), Mineral Exploration and Consultancy Ltd (MECL), and NALCO.

The company’s sales and net profit have grown at a CAGR of 15% and 108%, respectively, over the past five years.

Its ROE and ROCE have averaged 18% and 24% during the same period.

Moving forward, NALCO is expanding its aluminium smelting capacity, which is currently at 0.46 MTPA. After expansion, 0.5 MTPA is expected to be added.

The company is setting up a new aluminium refinery which is set to begin the commissioning process in June 2026 and will take 2-3 months to complete, followed by an additional 3-4 months to fully stabilise operations.

The management anticipates annual alumina production of around 3 million tonnes from the facility. Currently, NALCO is focusing on securing long-term contracts, spanning 1-2 years.

Union Budget FY27 created growth opportunities for India's metals and mining sector by focusing on boosting domestic production, strengthening supply chains, and enhancing value addition.

Conclusion

Critical minerals are no longer a niche segment of the global mining industry.

They have become strategic assets that will play a central role in the world's energy transition, technological progress, and geopolitical priorities over the coming decades.

For Indian companies, this opens up a long-term growth opportunity.

However, building a presence in this space requires significant capital, regulatory approvals, access to quality mineral assets, and years of execution before meaningful returns begin to emerge.

That's why investors should look beyond the headline announcements. The pace of project execution, partnerships, resource discoveries, and the ability to convert ambitious plans into profitable operations will ultimately determine which companies create shareholder value.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.

This article is syndicated from Equitymaster.com

The race for critical minerals has become one of the biggest investment themes of this decade.

Countries are scrambling to secure supplies of lithium, rare earth elements, graphite, nickel, and other strategic minerals that power everything from electric vehicles and renewable energy projects to semiconductors and defence equipment. Without these minerals, the world's energy transition slows down.

India doesn't have abundant reserves of many of these resources. But that isn't stopping the country from building its own critical minerals ecosystem.

Mining companies are expanding into strategic assets, metal producers are diversifying beyond their traditional businesses, and government-backed initiatives are encouraging domestic exploration as well as overseas acquisitions.

For investors, this shift is creating opportunities that extend well beyond the usual mining names. Some listed companies are making calculated bets that could shape their growth trajectory over the next decade.

Here, we look at four critical mineral stocks that are not only participating in this structural trend but also have ambitious expansion plans that investors should keep an eye on.

#1 Midwest

Set up in 1981, Midwest along with its subsidiaries and JVs is engaged in quarrying, extraction, processing and trading of natural stones (granite and slabs). It also manufactures diamond wires.

It's India's largest producer and exporter of this granite, reaching 17 countries across 5 continents.

What gives it an edge from competitors is the technology. The company has employed the latest technology and mechanised processes for the development and extraction of stone from the mines to have better recovery rates of the stone.

Furthermore, its vast network of distributors developed over the years, and its association with key players in both the domestic and export markets continues to support growth.

The company’s sales and net profit have grown at a compounded annual rate (CAGR) of 20% and 52%, respectively, over the past 5 years.

During the same period, its return on equity (ROE) and return on capital employed (ROCE) have averaged 19% and 25%.

Going forward, Midwest is moving beyond granite into the high-stakes world of quartz and rare earth materials. This positions it to solve a massive import headache for India.

Take solar glass, for instance that is used in solar panels, and is growing at 30% CAGR. India currently imports 65% of its requirements. Midwest aims to cater to around 11-13% of the raw material needs of this growing industry.

Under phase 2 of its expansion, it aims to produce ultra-high-purity quartz for use in semiconductors.

Midwest plans to enter heavy mineral sand mining and titanium slag production, while also exploring the extraction of minerals used in advanced ceramics and LED industries.

It has secured four exploration licenses in Sri Lanka for heavy mineral sand mining, with commercial operations targeted for FY27. One of these minerals - Monazite - is key raw material for rare earth elements used in aerospace, defence, chemicals, EVs, electronics, medical devices etc.

It has even signed an MoU with KMML (Kerala Minerals and Metals) to process these raw materials into high-value oxides.

By FY27, the management hopes to be a global name in titanium feedstock and rare earth oxides, serving everything from aerospace to medical devices. It is aiming to grow revenue 2.5 times over the next 2-3 years, and 3 times profitability in the next 3-4 years.

#2 Sterling Tools

The company is India's second-largest manufacturer of high-tensile cold-forged fasteners, primarily serving the automobile industry.

Its business is marked by diversification across segments and customers. It supplies to leading Indian automotive OEMs, with products used in both automotive and non-automotive applications.

As the company specialises in precision-engineered, cold-forged, high-tensile fasteners used across vehicles, it's a proxy play to the rare earth theme.

EV battery packs, thermal modules, and high-reliability joints require specialised fasteners. Sterling earns 42% of revenue from this segment.

In May 2025, Sterling Tools, through its subsidiary Sterling Gtake E-Mobility (SGEM), announced its entry into the manufacturing and marketing of rare-earth magnet-free traction motors for EVs. It has also expanded into drivetrain components for EVs.

The company entered into a technology licensing agreement with UK-based Advanced Electric Machines (AEM) to produce these motors at its Faridabad facility in Haryana. All this shows that in the coming years, the company could become an established player in the rare earth space.

Sterling Tools has grown its revenue and net profit at a CAGR of 23% and 13%, respectively, over the past 5 years.

Its ROE and ROCE have averaged 10% and 14%, respectively, during the same period.

Going forward, new customer homologations in the e3W and e-bus segments, along with product additions such as traction motors and on-board and off-board chargers are expected to support its volume growth.

While the company’s limited product diversification has been a constraint in the past, its ongoing efforts to expand its EV portfolio are expected to support growth.

#3 GMDC

This company is at the forefront of India’s critical minerals race. It’s also India's second-largest lignite-producing company and the No. 1 lignite merchant seller in the country.

A government-owned mining player, GMDC has recently pivoted from lignite to a critical rare earth minerals player.

In the critical minerals space, GMDC is developing one of the world's largest, rare earth deposits at Ambadungar.

This processing hub will integrate the entire rare earth value chain and enable downstream manufacturing across industries such as metals and alloys, NdFeB magnets, electric motors, glass, and optical glass.

Its rare earth portfolio includes key light rare earth elements such as neodymium, praseodymium, cerium, lanthanum, among others.

Most of the critical minerals it will process are critical for clean energy, electric mobility, and advanced technology applications, strengthening India's domestic critical mineral supply chain.

The company’s sales and net profit have grown at a CAGR of 16% and 37%, respectively, over the past five years.

Its ROE and ROCE have averaged 10% and 13% during the same period.

With an investment plan of ₹3,000-4,000 crore, GMDC is aiming to build an entire ecosystem from mining to refining. If executed well, this could be a big inflection point for the company.

Over the next few years, it could see a meaningful transformation, but the outcome depends heavily on execution. The Odisha Baitarani-West coal block can significantly scale revenues and shift GMDC from a lignite-focused player to a national coal producer.

Simultaneously, entry into rare earths and critical minerals, backed by government incentives, offers an opportunity if monetised successfully.

#4 NALCO

NALCO is a navratna Central Public Sector Enterprise (CPSE) under the ministry of mines.

The company is engaged in the manufacturing and sale of alumina and aluminium. In its recent earnings call, the company mentioned it’s exploring the extraction of critical minerals, particularly from alumina red mud and Bayer's liquor.

It has signed an MoU with a private company based in Chennai. The partner has installed a reactor at NALCO's site and has begun testing red mud samples. Experimental work is currently underway, with results expected in due course.

It has also signed an MoU with Bhabha Atomic Research Centre (BARC) to set up a pilot plant for the extraction of gallium from Bayer's liquor, further expanding its critical mineral recovery efforts.

It’s participating in overseas critical mineral exploration via Khanij Bidesh India (KABIL), a JV between Hindustan Copper (HCL), Mineral Exploration and Consultancy Ltd (MECL), and NALCO.

The company’s sales and net profit have grown at a CAGR of 15% and 108%, respectively, over the past five years.

Its ROE and ROCE have averaged 18% and 24% during the same period.

Moving forward, NALCO is expanding its aluminium smelting capacity, which is currently at 0.46 MTPA. After expansion, 0.5 MTPA is expected to be added.

The company is setting up a new aluminium refinery which is set to begin the commissioning process in June 2026 and will take 2-3 months to complete, followed by an additional 3-4 months to fully stabilise operations.

The management anticipates annual alumina production of around 3 million tonnes from the facility. Currently, NALCO is focusing on securing long-term contracts, spanning 1-2 years.

Union Budget FY27 created growth opportunities for India's metals and mining sector by focusing on boosting domestic production, strengthening supply chains, and enhancing value addition.

Conclusion

Critical minerals are no longer a niche segment of the global mining industry.

They have become strategic assets that will play a central role in the world's energy transition, technological progress, and geopolitical priorities over the coming decades.

For Indian companies, this opens up a long-term growth opportunity.

However, building a presence in this space requires significant capital, regulatory approvals, access to quality mineral assets, and years of execution before meaningful returns begin to emerge.

That's why investors should look beyond the headline announcements. The pace of project execution, partnerships, resource discoveries, and the ability to convert ambitious plans into profitable operations will ultimately determine which companies create shareholder value.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.

This article is syndicated from Equitymaster.com