NMDC will raise FY16 output by 31% to 46 million tonne

Company's steel plant to be ready by December 2016

State-run miner NMDC will be raising its output to 46 million tonne (mt) in the current financial year, as two mines with seven-mt iron ore capacity each will contribute.

According to Narendra Kothari, managing director, one of the units has already started and the other will be operational by August. So, the production will go up to 46 mt from 32 mt this year.

In December, Union Steel and Mines Minister Narendra Singh Tomar had directed NMDC to aim for an annual production of 100 mt by FY21.

Meanwhile, the company has been under pressure from the industry to slash its ore prices, which, according to the latter is 25 per cent higher compared to other miners based in Odisha. The higher prices are adversely affecting the industry.

Regarding ore prices, Kothari said, “I hope pricing sustains at this level and not go down further. Our prices are always connected to domestic demand-supply and we have also reduced our prices in the past few months.”

Domestic ore prices are under pressure, as internationally, the cost of the raw material has come down recently to $47 per tonne due to higher supply and subdued demand from China, the largest consumer of the ore.

The company in February and in March lowered ore prices by about 950 per tonne for lumps to Rs 3,250 per tonne and by Rs 600 a tonne for fines to Rs 2,460 a tonne. In April, however, it has kept prices unchanged.

Regarding its three million tonne steel plant at Nagarnar in Chhattisgarh, Kothari said the plant will be ready by December 2016 as its construction is in the advance stage.

The country's largest iron-ore producer and exporter is setting up the steel plant as part of its expansion, value addition and forward integration programme. The project, coming up some 16 km from Jagdalpur, would be set up with an estimated Rs 15,525 crore outlay.