Granite, used in kitchen tops, flooring and finishing for buildings, is often in the news — on legal issues related to over-mining in quarries. But in spite of such issues, there have been no serious supply disruptions or price rises on granite in the last few years. Industry observers believe this situation will continue this year as well.

Ample supply

India has sizeable granite reserves in states such as Tamil Nadu, Andhra Pradesh, Karnataka, Rajasthan and Odisha. The rock is classified as a minor mineral and the State government has all the powers to make rules and grant mining rights.

Mining operations may be curtailed when a quarry is shut down due to environmental concerns or illegal mining activities.

There have also been cases where mines are depleted completely after extraction, when a certain colour of granite becomes unavailable.

But as other colours are often available — India has 200 shades of granite — the lack of supply from a certain mine has not led to reduced choice for buyers.

There are many new unexplored mines and hence there is no risk of supply running out in the near future.

Data from the All India Granites and Stone Association’s website shows that only 3 per cent of the available resources is currently being explored.

Also, many smaller quarries do not use sophisticated equipment for extracting the stone. As a result, the efficiency of extraction is low. It is estimated that only 1 cubic metre of stone is extracted from 4 cubic metre of mine area.

Granite is exported either as raw blocks or after cutting and polishing. India’s granite export increased 25 per cent in 2013-14 to ₹12,000 crore.

Another source of granite supply is imports from countries such as China. In some cases, specific colours such as Blue Pearl from Norway are imported as some buyers have a preference for this shade.

While supply hasn’t been an issue, there has been strong growth in demand for granite for use, both for residential purpose and commercial constructions, such as malls. The primary demand for granite is for flooring and kitchen countertops. Granite is also used for gravestones and there is a large export market for this segment.

Stable prices

Prices have risen only gradually in the last 10 years, thanks to ample supply. Besides a few large producers, there are many smaller quarry operators and the competition in the industry is helping keep prices under check.

The price of raw granite has increased from around ₹55 per sq ft 10 years ago to ₹85 currently, says a quarry owner, largely due to higher labour costs. The availability of imported finished granite at competitive prices has also helped to check prices.

Stone prices vary based on their grade. Granite is classified based on strength, water absorption, density and wear resistance. Even within the same grade, colour differences affect prices due to user preferences. For instance, a darker shade of stone from Udayarnatham in Tamil Nadu is priced at ₹17,000 per cubic metre, much higher than the ₹10,000 per cu m for a medium shade, as per data from the Tamil Nadu Minerals website.

Larger blocks are more expensive — stones 0.5 cu m and larger from Siruvalai go for ₹57,500 per cu m, over double the price for 0.25-0.5 cu m size stones.

Transport costs also make the final price different for buyers in different regions, as quarries are concentrated in the hilly regions of a few states. For instance, a buyer in Chennai who insists on the Vizag blue colour instead of going with Paradiso, a locally available shade, will have to bear the cost of transport. Granite is quite heavy — weighing 2,600 kg per cu m — and handling large blocks can involve higher labour costs as well.

In many cases, the stones are cut to slabs in factories locally, making for easier transportation. The operation is labour and power-intensive and based on the efficiency of the factory, costs can vary 5-10 per cent for the same finished granite.

Prices for an end user are in the ₹120-300 per sq ft range, depending on the location, grade and colour.

Outlook

The price outlook for granite is expected to be benign. On the supply side, India has an estimated 46,230 million cu. m of granite resources, as per a Ministry of Mines report in January 2015. Miners are also using better equipment to reduce wastage and extract more stone.

Local demand may be muted as the housing segment is facing a downturn and new project launches have slowed.

Lower fuel costs will also help reduce transportation costs and thus keep a check on any increase in price.

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