Q&A: Rana Som, CMD, NMDC

`Our dream is to become a global firm`

Rana Som, chairman and managing director of state-run NMDC is in a hurry. The country's largest iron ore miner has several projects on the anvil. It has chalked out projects worth Rs 24,000 crore and the current term of Som, who envisaged most of these, ends on December 31.

"I should be in a position to take whatever we have started to a logical conclusion," he says in an interview to Prashanth Chintala. Edited excerpts:

What is the growth strategy?
Vertical and horizontal expansion. Whatever we are doing now is as per this plan. For vertical expansion, we are setting up steel and pelletisation plants. For horizontal expansion, we are opening new mines in the country and looking towards acquiring mines abroad.

What new mines are you planning to operate?
We are adding two more functional mines in the next couple of years. One is Bailadila 11B in Chhattisgarh and the other is the Kumaraswamy mine in Karnataka.

Construction on the two is going on. Bailadila 11B will be operational by this year-end and Kumaraswamy by the next calendar year. Both together will be adding eight to 10 million tonnes of annual output.

Besides, we are going to develop Bailadila deposits 4 and 13 and a mine in Jharkhand. Following this, our total production capacity will go up to 50 million tonnes per annum (mta) (as against 23.8 mta now). Our job is now to implement the plan for evacuation of ore.

What is the plan for evacuation?
We are laying a slurry pipeline for this from Bailadila to Visakhapatnam at a cost of Rs 3,000 crore. This will enable NMDC to transport pellets as feed to Vizag for meeting the requirements of steel producers.

What are your foreign ventures?
We have an exclusive venture in Tanzania for gold mining. We are going to start operations here, as the mining lease is expected shortly.

In Australia, we have signed two memoranda of understanding. One with Minemakers Ltd to develop a phosphate mine in northern Australia. The second is for acquiring a 50 per cent stake in Perth-based Legacy Iron Ore Ltd.

We also have a joint venture with Kopano Ke Matla Investment Company in South Africa. The JV has been formed and we are looking for assets in South Africa. These apart, we are looking for a coking coal project in Mozambique, for which due diligence has started.

At what stage is your plan to acquire a coal mine at Alabama in the US?
It is an operating mine which we want to acquire. Our financial advisers are working on the possible price range. I think we will get the due diligence report by the end of this month. We will take a final decision by the end of next month.

What about other foreign joint ventures?
We are expecting most of the proposed JVs to fructify by the end of this calendar year. The deal with Minemakers is expected to be clinched by September/October.

Why is NMDC focusing on projects abroad?
Our dream and expectation is to become a global company. Let's see how far we will be successful.

How many steel plants are you planning to set up as a part of your vertical integration plan?
For the time being, two. A Rs 15,525-crore, three-mta, integrated steel plant at Nagarnur in Chhattisgarh and a two-mta plant at Bellary in Karnataka. We have already paid Rs 63 crore to the Karnataka government for acquisition of 2,500 acres of land.

Are you facing any problems in land acquisition?
Fortunately, acquisition for the Nagarnur project has been very smooth. We got total support of the people, though the entire area is a tribal land. In fact, we have acquired 150 acres more than originally planned, as people came forward to sell.

Is this because you pay higher compensation?
We have a three-point approach. First, we are going to employ people from the families whose land has been taken.

Second, the compensation we paid had been much more than what had been notified by the state government.

Finally, we look at the project not just as a steel plant but as a developmental programme aimed at educating the local people.