NMDC eyes over 25% production growth in Q4

The country's largest iron ore producer, NMDC, expects its fourth quarter production to surge by over 25 per cent to 8.5 million tonnes on the back of an improved demand for the mineral from domestic steel sector.

"As demand from the steel sector has started reviving, we hope to achieve over 25 per cent growth in iron ore output in the fourth quarter," NMDC Chairman and Managing Director Rana Som told PTI.

In the third quarter ended December 31, 2008, NMDC had produced about 6.6 million tonnes of iron ore.

Som said the proposed increase in production would negate the effect of the 25 per cent cut in iron ore prices announced by NMDC for its long-term domestic customers from December 1.

"Though realisations from the sales in the fourth quarter will be low, its effect would be offset with increased output," he said.

Owing to slackening demand for steel from sectors like housing and automobile, steel companies like Essar, JSW, RINL and Ispat had reduced their iron ore offtake from NMDC by over 35 per cent from October onwards.

Navratna PSU produces about 30 million tonnes of iron ore per annum, of which it exports 3.5 million tonnes to Japanese and South Korean steel mills, while the rest is consumed by domestic steel producers.