Varun Industries has discovered 10 heavy mineral sand mining blocks in Madagascar containing 266.8 million tonne worth ilmenite, zircon, garnet, monazite and rutile among other minerals.

These elements are widely used in precision guided weapons, radars, wind turbines and medical diagnostic equipments among others, it said.

"Ilmenite and rare earth minerals are in high demand, and the demand growth is coupled with uncertain supply-side response, creating a deficit market in many elements and the foundation for significant increases in prices," AP Dhurandhar, vice president, exploration, said.

He expects demand for rare earth oxide will grow 12.5% by 2015, with a requirement for 2,45,000 mtpa (million tonne per annum) by 2015.

Varun Industries is involved in mining of uranium, thorium, gold and precious stones, apart from oil and gas exploration in Madagascar.