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Iron ore prices have bottomed out

NMDC had taken the lead in reducing prices so that steel can become affordable and pressure on inflation reduces.

Iron Ore
NMDC had taken the lead in reducing prices so that steel can become affordable and pressure on inflation reduces. Image: IE Online.

For the first time since April, state-run iron ore miner NMDC increased prices of fines on Thursday — 100/tonne on fines and 200/tonne for lump ore. CMD Sumit Deb told Surya Sarathi Ray that the prices of the steelmaking raw material may have bottomed out. Edited excerpts:

You have recently raised prices. Does it indicate the prices will go up further?

Iron ore prices have bottomed out. NMDC had taken the lead in reducing prices so that steel can become affordable and pressure on inflation reduces. Steel prices have now fallen considerably. Our latest price hike has been very marginal. But it does not offer any indication that prices will go up from here. Also, because of the huge rainfall in our mining areas, production was a constraint.

In the first quarter, your sales were down by 17% because of subdued demand from the steel industry. Are you seeing demand pick-up?

Definitely, there has been some improvement in offtake in the current quarter. Currently, whatever we are producing is getting sold. There is no issue on offtake.

Last year, NMDC produced 42 million tonne (MT) iron ore. What is your target for production for the current fiscal and in the long term?

We are looking at 47-48 MT production this fiscal. By 2025, we plan to increase our production to 67 MT and 100 MT by 2030. We are ramping up capacity at both Bailadalia in Chhattisgarh and Donimalai, Karnataka.

What’s the progress on demerger of the steel plant?

We’ll complete the process by the end of current quarter.

How much investment have you made in the steel plant so far and how much additional investment is required to become operational?

We have already made `22,000-crore investment in the steel plant. Some additional investment is required before the plant goes on stream, but that would be marginal. The plant would be operational by September this year.

Do you plan to set up another steel unit going forward?

No, we don’t have any such plan.

What will be your focus areas going forward?

The focus will mostly be on iron ore and value addition of the raw material through pelletisation. We have a 1.2 mtpa pellet unit in Karnataka and are putting up a two mtpa at Jagdalpur in Chhattisgarh. We are also looking at putting up pellet units in Vizag and other places so that we can have a six mtpa pellet capacity by 2025.

You are also looking for some mines abroad for acquisition.

Yes, we are open to that. NMDC has always been on the look-out. We have done explorations outside in various geographies, including Africa. Through our Australia-based exploration arm, we are looking at gold, cobalt, lithium and nickel assets.

You don’t need coking coal, still you have 26% stake in International Coal Ventures (ICVL). Are you going to continue with that?

It is a strategic investment and we are going to continue with that.

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