NMDC: Iron Ore Production Down 3%, Sales Drop 9% in CY18

During Apr-Dec'18, NMDC's iron ore production stood at 21.87 MnT (down 10% Y-o-Y).

NMDC - India's largest iron ore mine production recorded at 33.14 MnT in CY18, down marginally against 34.03 MnT in CY17.

Out of the total 33.14 MnT, Bailadila mines contributed 70% of total production at 22.94 MnT (up 4% Y-o-Y ) as against 22.03 MnT in CY17. The remaining 10.2 MnT was contributed by Karnataka mines, down 15% on yearly basis.

Towards the beginning of Nov'18, lease validity of NMDC's Donimalai iron ore mines in Karnataka ended following which operations at these mines were put to halt. However, Donimalai iron ore mines lease has been extended by the Cabinet of Karnataka Govt. w.e.f 04.11.2018 for the 20 years. But, amid pending decision on the representation by the Karnataka govt, iron ore production continued to remain temporarily suspended. NMDC Donimalai has EC limit of 7 MnT p.a. and produces around 6-6.5 MnT iron ore annually.

The miner's production for the month of Dec'18 witnessed at 3.1 MnT, down 6% against 3.29 MnT a month ago. Out of the total production for the month, Bailadila mines contributed 2.36 MnT (down 9% M-o-M) and Karnataka accounted for 0.74 MnT (up 7% M-o-M).

NMDC iron ore sales from Karnataka mines down 25% in CY18

The sales from NMDC Karnataka mines for CY18 recorded at 9.48 MnT, down 25% as against 12.62 MnT in CY17. The sales from Bailadila mines stood almost stable on yearly basis at 23.09 MnT.

NMDC recorded total iron ore sales at 32.57 MnT, down 9% as against 35.62 MnT in CY17. The decline is due to expiry of NMDC's LTA (Long-term agreement) to export iron ore to South Korea and Japan owing to which the miner recorded nil exports for a period of five months from Apr'18 to Aug'18. On 25th April'18, NMDC received approval for supply of iron ore to Japan and South Korea for a period of three years i.e from Apr'18 to 31 Mar 2021. Later the miner resumed exports in Sep'18.

NMDC iron ore sales increased in Dec'18

The total sales from NMDC, Bailadila mines for the month of Dec'18 recorded at 2.84 MnT, up slightly M-o-M against 2.75 MnT in previous month. The increase in sales is attributed to price cut by the miner. NMDC had slashed iron ore price between INR 450-785/MT for Dec'18 via two successive price cuts announced.

Out of 2.84 MnT, 76% of total production was contributed by Bailadila mines at 2.17 MnT (up 5% M-o-M) while remaining 0.67 MnT contributed by Karnataka mines.