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NMDC Limited is planning a capital expenditure of ₹3,750 crore and iron ore output of 44 million tonnes (mt) duringFY22, up from 35 MT achieved during the Covid-hit 2020-2021.
The State-owned iron ore mining major has registered strong volume growth and revenue growth during the first five months of this fiscal ended August 2021 and expects to sustain this growth momentum.
“We have targeted iron ore output of 44 million tonnes this fiscal. And we are drawing up a big capex plan so that we can achieve a target of 100 million tonnes per annum of iron ore output within 4-5 years,” Sumit Deb, CMD, NMDC, said at an investor meet.
Also read: NMDC logs record iron ore output in August
“NMDC, which is setting up a forward integration Nagarnar Iron and Steel Plant in Chhattisgarh, is targeting the commissioning of the plant in late Q3 or early Q4. Simultaneously, we are planning to start the coke oven unit,” Deb said.
NMDC has planned a capex of ₹3,750 crore in FY 2022 and a large chunk of it, ₹2,150 crore, is for the 3 million tonnes per annum (mtpa) Nagarnar Steel plant and the rest, ₹1,600 crore for other projects including the slurry pipeline ( ₹250- ₹300 crore) and ₹200 crore for the third trading plant at Kirandul with 12 mtpa.
“Apart from that we will be spending some money in the coal blocks, which are in the nature of strategic payments,”Amitava Mukherjee, Director, Finance, said.
“The slurry pipeline is supposed to come up by Q3 of 2023. We have already awarded ₹1,000 crore contract to L&T for laying of the pipeline. The work is underway.”
Demerging steel business
“The NMDC management is in the process of demerger of the steel business into a new company. And once it is demerged, it will have a mirror shareholding of NMDC where the Government of India would own 60.38 per cent of the shares of the new steel company. Thereafter the sales of those shares are within the jurisdiction of the Ministry of Finance or DIPAM. The NMDC management is not involved in that share sale except for the fact we would be participating in the various road shows. But the actual disinvestment through the sales would be done by the Ministry of Finance that is DIPAM,” the company said.
“The revised cost estimate for the steel plant is ₹22,000 crore. We have already spent around ₹18,700 crore so anything between ₹2,500-3,000 crore is still left over,” the company said.
The Donimalai pellet plant will start contributing to the topline and bottom line from Q4.
And the company expects that the coal mines will start hopefully from Q3 or Q4 but the sale could take couple of more quarters.
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