India: NMDC sets 50 mnt of iron ore production guidance for FY'24

India's largest iron ore producer, NMDC, registered a noticeable third-quarter performance in Q3FY'23 (October-December 2022). The company reported its best-ever iron ore production in this quarter.

Performance highlights:

• Iron ore production up 50% q-o-q: The miner recorded iron ore output at 10.7 million tonnes (mnt) in Q3FY'23, a significant rise of 50% q-o-q as against 7.11 mnt in Q2FY'23. The volumes remained largely stable y-o-y.
  
  
• Iron ore sales up 14% q-o-q: NMDC's total iron ore sales volume increased 14% q-o-q to 9.58 mnt when compared to 8.43 mnt in Q2FY'23. The entire quantity of 9.58 mnt was sold in the domestic market.
  
  
• EBIDTA up q-o-q: The company's EBITDA was recorded at INR 1,331 crores in Q3FY'23, up marginally as against INR 1,280 crores in Q2FY'23.
  
  

Highlights of the investors' call:

• Iron ore production guidance up: Expected production guidance in FY'24 will be around 50 mnt, up by around 10 mnt. In 9M FY'23, NMDC's iron ore production stood at 26.7 mnt.
  
  
• NMDC to explore iron ore exports in Q4: With exports opportunity opening up amid strong demand from China, there is a possibility of export of low-grade iron ore (less than Fe58%) from Vizag port in Q4FY'23.
  
  
• Nagarnar steel plant commissioning: Commissioning of the 3 mnt Nagarnar steel plant is expected by 31 March, 2023 with the production of coke and the blast furnace being ready.
  
  
• Nagarnar pellet plant commissioning: Commissioning of the 2 mnt Nagarnar pellet plant is expected by the end of next year.
  
  
• Pellet plant in Visakhapatnam: NMDC aims to set up a pellet plant in Visakhapatnam in the future, considering the enhancement plans. However, capacity is yet to be decided.
  
  
• Capacity enhancement of around 70-77 mnt: On the logistics front, NMDC plans to double its railway lines with the help of railways to 30 rakes from the current 15-16 rakes which are already in process (only 25% of work left) and the setting up of a 135 km slurry pipeline with the capacity of 15 mnt up to Jagdalpur which is expected to be commissioned by the end of this calendar year (CY). Post-this, the mining major expects its capacity to be enhanced to around 70-77 mnt.