India: Indian cement companies are on the lookout for overseas mines to secure supplies of gypsum for cement production.

Domestic gypsum supplies are limited, which is forcing Indian cement makers to look to acquire gypsum mines in countries like Thailand, Oman and Iran. Indian cement producers are also looking into synthetic gypsum production.

The domestic gypsum deficit has led to increased dependence on imports and synthetic gypsum to meet cement demand. Manufacturing one tonne of cement requires 4 - 5% of gypsum as a raw material.

In India, gypsum reserves are found in Rajasthan, Gujarat, Jammu and Kashmir, Himachal Pradesh, Tamil Nadu and Uttar Pradesh. About 90% of the total Indian production of gypsum comes from western and north-western Rajasthan. At present, usable gypsum reserves in India amount to 140 - 150Mt, of which around 125Mt is available to the cement industry. These numbers are for Rajasthan and Gujarat, as reserves in other states are unusable. This supply will be enough to support the cement industry for seven or eight years.

Vinod Juneja, managing director of Binani Cement, said that the shortage of domestic gypsum has forced the company to consider the possibility of overseas mine acquisitions, but the high cost of such acquisitions is a deterrent. "We have looked at gypsum mines for acquisition in the Middle East, South Africa and Iran, but the prices are too high so it does not prove to be viable since the returns are not high," he said. "Gypsum is a very important raw material for cement production and we don't want to depend totally on imported gypsum," Juneja added.

Some others, like JK Cement, are yet to decide how to tackle the gypsum shortage. "Gypsum is in shortage and we are working out a solution for it," said Madhavkrishna Singhania, special executive at JK Cement. "There are two options; either we acquire a mine overseas or produce synthetic gypsum, so right now we are contemplating these options and in a year or two we will have to figure out what needs to be done," he added.

The most common solution to tackle the shortage is importing gypsum. However, imports attract a 2.5% duty, thus increasing costs for an industry that has also been facing other increased costs in an economic downturn. High transport, logistics and raw material costs have hit margins across the cement sector.