NMDC to increase iron ore output by 10% next year

The company has drawn up an ambitious plan to increase the production to 50 million tonnes in 2018-19 and 100 million tonnes in 2024-25

State-owned NMDC is set to increase iron ore production by at least 10 per cent to 32-33 million tonnes (mt) this financial year. During 2013-14, its production stood at 30, the highest so far.

Speaking to Business Standard, NMDC Chairman and Managing Director Narendra Kothari said, “I am committing at least 32 mt this year, though our intention is to produce more than that. In the next two years, we intend to produce 36-37 mt (annually). Our aim is to produce 50 mt by 2018-19 and touch 100 mt by 2024-25.”

He added the company would increase production at its two mines in Karnataka, Donimalai and Kumar-aswamy, to at least 10.5 mt this financial year. In 2013-14, NMDC produced nine mt in Karnataka.

“The Supreme Court has allowed us to produce 12 mt a year in Karnataka. Earlier, there were some issues such as mechanisation but we have resolved those. Next year, we will produce at least 12 mt in Karnataka,” Kothari said.

The company, he added, was constantly exploring new mines in several states, including Karnataka, with its own resources. “Unless we explore new mines, we cannot extend the life of our mines. In Karnataka, we were supposed to close our mines five years ago but new exploration helped us continue. We have just completed mining at the top layers of the hill; we will go down by 50-100 metres,” he said.

NMDC has increased its stake in Australian company Legacy Iron ore to 78 per cent. In 2011, it had acquired 48.8 per cent in that company, its first foreign acquisition. “There are huge iron ore reserves, in excess of a billion tonnes, in Australian mines. We will start mining in a year or two. We will also bring their exploration expertise to India,” Kothari said.

“Irrespective of prices of iron ore falling in the international market, we will not reduce prices in the domestic market. The fixation of price depends on the demand and supply situation. There is good demand for iron ore in the country. We will continue to increase our production,” he added.

NMDC, he said, would invest Rs 3,500 crore on diversification. It is setting up a three-mt-a-year steel plant in Nagarnar (Chhattisgarh), which will be operational by 2016-17. A new pellet plant in Donimalai (Karnataka), which has a capacity of  one mt, will be commissioned this financial year. The company has awarded the operation and maintenance contract to KIOCL Limited for a period of three years, he added.