India: NMDC achieves record iron ore production, sales in FY'24

• Production guidance at 53-55 mnt for FY'25
  
  
• Miner has no immediate plans of entering export market
  
  

NMDC, India's largest iron ore producer, recently announced its financial year 2023-2024 (April 2023-March, 2024) results. Notably, the mining major reported its best-ever iron ore production and sales in FY'24.

Expected production in FY'25 will be around 53-55 million tonnes (mnt) which will be achieved via enhancement of its Kumaraswamy mines in Karnataka and incremental volumes from Chhattisgarh's deposit No. 5.

Performance highlights:

• Iron ore production up 10% y-o-y: The miner recorded iron ore output at 45 mnt in FY'24, a rise of 10% y-o-y as against 41 mnt in FY'23.
  
  
• Iron ore sales up 16% y-o-y: NMDC's total iron ore sales volumes increased 16% y-o-y to 44 mnt compared to 38 mnt in FY'23. The entire quantity of 44 mnt was sold in the domestic market.
  
  
• Average sales realisation rises: The miner's average sales realisation stood at INR 4,732/t in the period under review, an increase of 4% y-o-y from INR 4,565/t in FY'23.
  
  
• EBIDTA increases over 25% y-o-y: The company's EBIDTA was recorded at INR 8,709 crore in FY'24, rising significantly as against INR 6,810 crore in the previous fiscal.
  
  
• PAT rises marginally y-o-y: NMDC's profit after tax (PAT) rose marginally by 2% y-o-y to INR 5,632 crore in FY'24 compared to INR 5,529 crore in FY'23.
  
  

Highlights from investors' call:

• No immediate plans to enter export market: The company stated that it has no plans to enter the export market, the major reason being that the majority of the ore it produces is high grade which currently attracts 30% export duty. Moreover, the miner is getting comparatively higher realisations in the domestic market. Also, as per official statements, NMDC is capable of dispatching around 60 mnt of iron ore easily considering the rising demand by major steel producers.
  
  
• Temporary halt to Nagarnar pellet plant work: Enhancement of the miner's Nagarnar pellet plant has been stopped temporarily over some financial issues, as per officials at the earnings call.
  
  
• Bacheli beneficiation plant commissioning stopped: The miner had earlier announced its plan to commission a beneficiation plant at Bacheli, Chhattisgarh, by FY'25. Officials said that the commissioning of the plant has been halted till further notice due to some commercial issues. The company is in negotiations with contractors.