NMDC will ready plan to meet 100mt iron ore output target

KOLKATA: With the mines ministry directing it to advance its production target by four years to produce 100 million tonne (mt) of iron ore by 2020-21, NMDC is racing against time to prepare a detailed action plan to achieve it.

The company which produced 30 mt of iron ore in 2013-14, is faced with the daunting task of expanding output more than threefold in less than five years with few new mines in hand and some of its existing ones located in areas prone to Maoist attacks.

At a review meeting on Tuesday, union steel & mines minister Narendra Singh Tomar urged NMDC to aim for 75 mt of iron ore by 2018-19 and 100 mt by 2020-21, to increase iron ore availability in the country. The target will be incorporated in the MoU between NMDC and the government. While NMDC plans to raise production to 65 mt by 2018-19 and to 100 mt by 2025, it will now have to advance its production targets to meet the ministry’s directive.

The development boosted the NMDC scrip which went up 1.71 per cent to close at Rs 136.70 at the BSE on Wednesday. The ministry’s move is aimed at enhancing supply to provide steel industry access to domestic iron ore at reasonable prices. It is in line with government’s plan to raise annual steel production to 300 mt by 2025, for which 500 mt of iron ore will be needed annually.

“We are currently preparing a detailed action plan till 2025 to achieve a higher production level. The plan will include details of achieving the target of 100 mt of production,” Narendra Kothari, chairman, NMDC said. The country’s largest iron ore miner said it will expand production by 14 mt by August 2015 from two new mines that are slated to come into production. This includes the 11B mine at Bailadila deposit in Chhattisgarh and the Kumaraswamy mine in Karnataka both of which have a capacity of 7 mt.

NMDC is gearing up to jack up output to 48 mt next year, with the next step likely to raise output to 65 mt.

However, the company would require new mining leases to expand its capacity since it has no mining leases for development at present. “Unless NMDC gets new MLs this could seriously hamper its expansion plans. If necessary, it may also have to participate in auctions to get allotment of mines,” a mining industry expert said.

Apart from expansion of its own mines in Karnataka, and Chhattisgarh, NMDC’s joint ventures with Jharkhand and Chhattisgarh state mineral companies is also expected to contribute significantly to growth in output. NMDC is planning to set up two new slurry pipelines from Vizag port to the main mining belt to evacuate the mined material effectively. Each of these pipelines will have a capacity of 15 mt and cost around Rs 2,500 crore each.