NMDC to commence prod from MP coal blocks by year end

State-run NMDC today said that its two coal blocks in Madhya Pradesh, containing an estimated 100 million tonnes of reserves, are likely to commence production by the end of this year.

The two projects at Shahpur East and Shahpur West are NMDC's maiden ventures in the coal business and the estimated output of about 1 million tonnes per annum.

"We are hopeful of developing two underground mines -- Shahpur East and Shahpur West in Shahdol and Umaria districts, Madhya Pradesh by the year-end," a National Mineral Development Corporation (NMDC) official told PTI.

He said the blocks -- spanning a total area of about 13 square kilometres -- were allocated by the Ministry of Coal in 2007 for commercial use and the output will be sold to power producers.

Sources said the company has already submitted a Mining Plan to the Ministry of Coal and is hopeful that it will be cleared by March.

Meanwhile, NMDC -- which is now diversifying into the steel-making business -- has been looking for captive coal reserves to feed its proposed new plants in Karnataka and Chhattisgarh.

The company is a part of International Coal Ventures Ltd -- a consortium of PSUs like SAIL, Coal India and NTPC -- which was formed with the objective of acquiring overseas coal assets.

Independently, NMDC is considering proposals to acquire coal mines in countries like South Africa, Russia, Mozambique and the US.

In Russia, NMDC is looking to acquire Kolmar's coal mines and other nearby assets. The coal mines are understood to have estimated reserves of 400 million tonnes.

NMDC, along with two other companies, has already submitted a $230 million non-binding bid to buy a 70 per cent stake in a coal mine in Australia owned by Perth-based Atlas Iron.

The company has indicated that it plans to set up a 2 million tonnes per annum (MTPA) plant in Karnataka. In addition, NMDC plans to commission a 3-MTPA integrated steel plant in Chhattisgarh by 2014 at an investment of over Rs 15,000 crore.

It has also inked a pact with Russia's Severstal for a 5-million tonne steel plant in Karnataka at an estimated expenditure of Rs 25,000 crore.

The miner is investing Rs 3,400 crore to augment its annual iron ore production to about 41 million tonnes from around 22 million tonnes at present.