NMDC extends gains on bagging 2 coal blocks in Jharkhand

Shares of NMDC were up 0.81% at Rs 124.3, extending their gains for ninth session in a row.

The stock has surged 13.62% in nine trading sessions. The stock has rallied 42.46% in last three months as compared to 7.73% rise in Nifty Metal index. The stock trades above its 20 days & 50 days simple moving average placed at 109.76 and 106.62 respectively. These levels will acts as support zone in near term.

State-owned NMDC said on Thursday it has been allocated two coal blocks in Hazaribagh district of Jharkhand.

The Rohne coal block has extractable reserves of 191 million tonnes and planned production capacity of 8 million tonnes per annum. Besides, the Tokisud North coal block has extractable reserves of about 52 million tonnes of thermal coal and planned production capacity of 2.32 million tonnes per annum. Both the blocks are located at an aerial distance of 10 to 15 km. Rohne coal block has coking coal which may require washing of coal for feeding into steel plant.

Meanwhile, the state-run miner on Wednesday received approval of the Indian Bureau of Mines (IBM), Ministry of Mines, Government of India to hike output at Kumaraswamy iron ore mines from 7 million tonnes per annum (MTPA) to 10 MTPA. The effective date of approval is for 2020-21 and 2021-22. NMDC operates the Kumaraswamy Mines in Karnataka.

Further, the company on Tuesday said it received a 20-year extension for four mines in its biggest mining project in Chhattisgarh. In a statement, NMDC said Chhattisgarh's government had extended four mining leases in state's Bailadila area upto the year 2035. The mining leases were valid upto 31 March 2020. The disclosure was made by the company after market hours yesterday, 17 December 2019.

In a separate announcement on Tuesday, NMDC said it received allocation of 'Rohne' coal block. This allocation would ensure the coking coal requirement of NMDC's upcoming steel plant at Nagarnar, Chattisgarh to some extent. This is an important step for raw material security for the steel plant and also to some extent reduce the import of coking coal.

On standalone basis, NMDC reported a 10.5% rise in net profit to Rs 703.27 crore in Q2 September 2019 over Q2 September 2018. Net sales dropped 8% to Rs 2241.76 crore during the said period.

NMDC is India's single largest iron ore producer, presently producing about 35 million tonnes of iron ore from 3 fully mechanized mines, two located in Chhattisgarh and one in Karnataka. As of 30 September 2019, the Government of India held 72.28% stake in the company.

Powered by Capital Market - Live News