July 3, 2012

 

India's NMDC to put in US$6 billion to double iron ore output

 

 

In a bid to nearly double its output by 2016, India's largest iron ore producer and exporter, the National Mineral Development Corporation (NMDC), will invest US$6 billion over the next five years, the company told Metal Bulletin.

 

"Our current production, as of March 2012, stands at 28 million tonnes per year (tpy). We are planning to achieve a target of 40 million tpy by 2014-15," a spokesman for the government-owned miner said.

 

"We have cash reserves of about US$4 billion as of Monday (July 2), and by 2016-17 we will have added to our reserves [and] that will take care of our funding," he said.

 

"We will not go for any loans," he said. "However, it is for the government to decide on stake sales."

 

The company is planning to expand iron ore mining capacity at its Bailadila mines to 36 million tpy by 2014-15 from the existing 20 million tpy capacity.

 

"We will be commissioning a US$3 billion steel plant in Chhattisgarh that will produce hot rolled coils by 2014-15," the spokesman said.

 

"By March 2013, we will be opening a 1.2 million tpy iron ore pellet plant in the Bellary district of Karnataka. The plant can be expanded to two million tpy. The plant is being developed as a 50:50 joint venture with Russian firm Severstal," he added.

 

NMDC signed a memorandum of understanding in May 2012 with Rashtriya Ispat Nigam Limited (RINL) for the development of a slurry pipeline and for setting up a pellet plant at Visakhapatnam.

 

The company posted a net profit of US$1.5 billion in 2011-12, up 12% compared with US$1.25 billion the previous year.

 

The Indian government has a 90% stake in NMDC, with the balance held by insurance companies (5.55%), financial institutions and banks (2.49%) and foreign institutional investors (0.07%), among others.

 

NMDC is also involved in the exploration of copper, rock phosphate, limestone, dolomite, gypsum, bentonite, magnesite, diamonds, tin, tungsten and graphite. It operates the only mechanised diamond mine in the country at Panna in Madhya Pradesh.