India: NMDC to Invest USD 1 Billion in 3 Years to Hike Output Capacity by 55%

State-owned iron ore miner NMDC plans to spend around USD 1 billion in three years to ramp up production capacity by around 55% to 67 MnT from 43 MnT now.

In the Bailadila sector, it proposes to enhance capacity from the existing mines to 38 MnT from 29 MnT now. The miner plans to create 15 MnT additional capacity through development of new mines in the Bailadila sector. In the Donimalai sector, where mining activity mines have remained suspended for the last few months, no capacity expansion has been envisaged and as such, capacity will remain unchanged at 14 MnT by 2021-22.

"We hold around 18-20% share in the domestic market and hope to maintain the share in future," said NMDC's Chairman-cum-Managing Director Baijendra Kumar at a press conference in Delhi.

As on April 2018, NMDC's mines have a total reserve of 1,319 MnT having an average of 63% Fe content. The company is trying to acquire more mines through the government dispensation route.

After tasting success through the joint venture route in Chhattisgarh, the company is also working on forging partnerships with state-owned mining companies in neighbouring Jharkhand. Opportunity for overseas acquisition is also being explored.

Mainly because of the closure of the Donimalai mine, NMDC's iron ore production fell last fiscal by 9% to 32.36 MnT from 35.57 MnT a year ago. For the current fiscal, the company has set 36-37 MnT production target, however, that will depend on the fate of the Donimalai sector.

Mr. Kumar said the company was awaiting a verdict from the Karnataka High Court soon. NMDC had in November last year moved High Court challenging the Karnataka government's decision to impose a hefty 80% premium on the ore sales from the mine.

Donimalai sector's contribution to the total production kitty of NMDC fell from 6 MnT in 2017-18 to just 2 MnT in 2018-19.