India: Iron Ore Production from NMDC's Kumarswamy Mines Increase Sharply in Q1FY'20

NMDC Ltd- India's largest iron ore miner reported production of 8.43 MnT in Q1 FY'20 against 6.98 MnT in Q1 FY'19, registering a growth of 21%. Similarly, iron ore sales has increased from 8.67 MnT in Q1 FY'20 against 6.78 MnT in Q1 FY'19, witnessing a growth of 28%. These are the best ever performance since inception for Q1 (excluding Donimalai which was non-operational in Q1 FY 20).

SteelMint attended their earning call conducted today and some of the key points from Q1FY'20 results announced are as follows:

-- Regarding the resumption of iron ore operations at Donimalai mines - In accordance with the decision of Hon'ble High Court on NMDC's Donimalai mines received in July, NMDC is in process of getting the other clearances done like Forest clearances and Environment Clearance etc. Thus at this point of time, due to the flood-like situation in Karnataka has slightly delayed the process of renewal and clearance, therefore, no fixed timeline has been revealed regarding the resumption of operations at Donimalai mines.

-- Sharp increase in production from Kumarsawamy mines- Company reported production of 2.35 MnT in Q1 FY20 against 1.81 MnT in the previous quarter. Iron ore sales from Kumaraswamy stood at 2.1 MnT in Q1 FY20. Company has EC limit of 7 MnT pa production in Q1 FY20.

-- Export volumes- NMDC has reported around 6,00,000 MT iron ore exported from C.G mines in Q1FY'20.

As per the sources, NMDC C.G may keep iron ore prices unchanged for Aug'19 deliveries. In the month of July the company had rolled over iron ore prices. Prices of Baila lump ore is at INR 3,100 per wet metric tonne (wmt), Baila iron ore fines are at INR 2,860 per wet metric tonne and DR CLO is at INR 3,600 per wet metric tonne. FoR prices mentioned are excluding Royalty, DMF, NMET and other taxes.