NMDC sales, production down in FY16

Company reported sales of 28.87 million tonnes (MT) in 2015-16, down from the 30 MT it clocked in 2014-15

A weak market sentiment coupled with subdued demand led to decline in sales and production of the country's biggest iron ore miner NMDC in 2015-16.

The public sector undertaking reported sales of 28.87 million tonnes (MT) in 2015-16, down from the 30 MT it clocked in 2014-15.

It had reported sales of 30.87 MT in 2013-14 fiscal and 26.48 MT in 2012-13.

As for production, the 'Navratna' company reported an output of 28.32 MT last fiscal, down from record production of 30.44 MT in 2014-15.

In 2013-14, it had clocked an output of 30.02 MT, while in 2012-13 it was 27.18 MT.

Iron ore is the main ingredient used in making steel.

Analysts have attributed the decline in sales to the subdued demand for iron ore by steel makers.

They said that in India, as well as globally, the ore market has been hit by over production, while on the other hand steel demand has been softening.

However, they were of the view that iron ore market in the country will revive marginally in the short and medium term on the back of several infrastructure development projects launched by the government such as smart cities and housing for all.

A senior official from a mining company said sluggishness in iron ore prices is expected to remain for the next two years internationally.

However, after the measures such as minimum import price, safeguard duty and anti-dumping duty on steel products by the government, iron ore offtake by domestic producers is expected to increase a bit.

NMDC plans to invest Rs 40,000 crore over eight years to achieve a target of 100 MT per annum of iron ore from the current levels of little over 30 MTPA.

The firm will invest in developing new mines, steel plant (Nagarnar), Legacy Iron ore company (Australia) and the slurry pipe line 9 from (Kirandul to Vizag), among others.

The state-run miner also raised iron ore lumps and fines prices with effect from April 4, 2016.

It raised lump ore prices by Rs 150 to Rs 2,100 per tonne and that of fines was also raised by Rs 150 to Rs 1,860.

Last month, NMDC had raised the lump price by a little over 8 per cent to Rs 1,950 per tonne, its first hike for the higher grade of the ore in over one-and-a-half years.

The firm had also raised prices for iron ore fines by 10 per cent to Rs 1,710 per tonne for March. Last time, NMDC had raised the prices of fines in November 2015.