NMDC expects demand for iron-ore to increase in second-half of this fiscal

By: | Published: September 29, 2015 6:17 PM

After facing a challenging environment, National Mineral Development Corporation Ltd (NMDC Ltd) expects the demand for steel to increase during the latter part of the year.

After facing a challenging environment, National Mineral Development Corporation Ltd (NMDC Ltd) expects the demand for steel to increase during the latter part of the year.

“Iron ore prices may hover between $55 and $65 per tonne for some time due to the subdued demand for steel in global markets,’’ Narendra Kothari, chairman and managing director of NMDC said on the sidelines of the company’s annual meeting of shareholders in Hyderabad. “ However, the steel demand may go up in India with the government’s thrust on infrastructure sector.”

Kothari said the recent government decision to bring about certain restrictions on import of steel items has had a positive impact on domestic companies. Iron ore is a key ingredient to make steel.

In the process, NMDC has also begun discussions with some buyers in Japan to enter into long-term export contracts. The existing arrangement for supply of iron ore expired in March 2015, where about 10% of the produce was exported.

Expecting a surge in the demand, NMDC plans to invest Rs 40,000 crore in the next eight years to reach a target of 100 million tonnes per annum of iron ore production by 2025, from the current levels of little over 30 MTPA. It has planned a total capex of Rs 3,600 crore for this fiscal, and Rs 4,000 crore for the next fiscal, as part of its long-term plans for expansion and diversification by 2022.

“The investment will go into developing new mines, steel plant, legacy iron ore company in Australia and slurry pipeline from Kirandul to Vizag, among others,” Kothari said.

NMDC has spent Rs 7,730 crore until last month on the upcoming 3 MTPA steel plant in Nagarnar in Chhattisgarh. The total project cost is Rs 15,500 crore. Besides, the Deposit-13 mine, spread over 413.74 hectares of land, being jointly developed by NMDC and Chhattisgarh Mineral Development Corporation (CMDC) has received environmental clearance and is expected to come to production in the next two years.

Meanwhile, the company is also in the process of setting up a small gold refinery in Tanzania, Kothari said, but declined to give details on investment. “Tanzania exploration is going to be complete. We will start mining of gold ore and setting up a small refinery next year. The investment will be very small. We will make a JV there. The final stages of negotiations are still going on,” he added.

NMDC is also in the process of acquiring assets in Indonesia and South Africa besides other geographies. The company was able to achieve record production and sales during

“Despite a challenging environment, we achieved the highest ever iron ore production of 30.4 million tonnes and iron ore sales of 30.5 MT during 2014-15, crossing the 30-MT barrier for the second year in succession,” he said.

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