The biggest challenge is to ensure all projects are up on time: C S Verma

Interview with CMD, NMDC

Iron-ore miner NMDC has embarked on an ambitious growth programme, raising its capex in the 12th Five Year Plan by about ten times compared to that in the 11th Plan. C S Verma, chairman and managing director shares his views on the company’s future plans, in a conversation with Prashanth Chintala. Edited excerpts:

Given the current business environment, what are the challenges NMDC is facing?
NMDC’s major challenge is to make proper investments for evacuation of iron ore. We are enhancing our production capacity from the present level of 28 million tonnes (MT) a year to 42 MT in the next three years. We are also making a perspective plan for NMDC, ‘Vision 2020’, whereby we plan to increase our iron ore production capacity to 50 MT. The Board of NMDC has also taken a decision to invest in value-added facilities. In response to that, we are setting up a steel plant in Nagarnar (in Chattisgarh). We have also taken a decision to set up a pellet plant. The biggest challenge is to ensure that all these facilities will be operational on time so that there are no time and cost overruns.

What are you doing to overcome this challenge?
We have prepared a very ambitious capex plan. Our capex, which was Rs 3,083 crore in the 11th Five Year Plan has been increased to Rs 30,072 crore in the 12th Plan. In the year 2012-13, our capex is around Rs 4,500 crore for the acquisition of foreign assets.

What is the medium-term outlook for NMDC?
Steel consumption will go up from 80 MT today to 150 MT by the end of the 12th Plan and up to 200 MT by 2020. Steel capacity enhancement means we need more iron ore.

Any specific initiative the company is taking that will add to shareholder value?
Our heavy capex will generate more turnover and more profit for the company. Hence, all the stakeholders of the company will be benefited.

At what stage is NMDC’s fresh round of negotiations with Anglo-Australian miner Rio Tinto?
We have to take a final view of this. (The joint venture between NMDC and Rio Tinto for looking at investment opportunities in India and abroad was mutually scrapped a year ago).

What do you say about Minemakers of Australia dropping NMDC as its potential joint venture partner?
We have a perspective to enter into more joint ventures so that we can acquire assets and create value-added facilities. We are going to have joint ventures not only in our value-added facilities like pelletisation and steel plants but also while we are acquiring assets overseas.