NMDC to double pellet production capacity; to set up ₹800-cr plant in Chattisgarh

Abhishek Law | | Updated on: Aug 15, 2022
NMDC Chairman and Managing Director, Sumit Deb

NMDC Chairman and Managing Director, Sumit Deb | Photo Credit: KAMAL NARANG

NMDC also plans to set up lithium exploration in Karnataka

The state-run iron-ore miner, NMDC Ltd, is investing ₹800 crore as it looks to more than double pellet production capacities. A 2 million tonne per annum (MTPA) plant is being planned at Jagdalpur in Chattisgarh, and the company is scouting locations for at least four more, the Chairman and Managing Director, Sumit Deb, told BusinessLine.

The Chattisgarh plant is expected to go on stream by 2025.

NMDC’s existing iron ore pelletisation plant with a 1.2 MTPA capacity is located in Karnataka.

According to Deb, the focus will mainly be on iron ore mining and the value addition of the raw material through pelletisation. The other pellet plants may “not necessarily be at mine pit-heads”.

“We are putting up a 2 MTPA unit at Chhattisgarh. Plans are afoot to put up pellet units in Vizag and other places so that we can have a six MTPA pellet capacity by 2025,” he said.

Pelletising is the process through which iron ore fines are transformed into an agglomerated form (pellet) suitable for use in an iron-making furnace at steel mills, such as a blast furnace or an electric arc furnace. In its end product form, iron ore pellets are spherical, measuring 6 mm to 16 mm in diameter and having high crushing strength.

Interestingly, the company increased iron ore prices by ₹200 per tonne of lump ore and ₹100 per tonne for fines, its first hike in FY23 after reductions because of the falling demand. The nee pri ces have come into effect from August 11 onwards. Lump ore is priced at ₹4,100 per tonne, and fines are now priced at ₹2,910 per tonne, respectively. 

We believe the prices have bottomed out,” he said.

Lithium exploration

According to Deb, NMDC has already obtained a prospecting licence to explore lithium reserves in the Raipur district of Karnataka.

Under the Mines & Minerals (Development & Regulation) Act, 1957, “Prospecting Licence” means a licence granted to undertake “prospecting operations” to explore, locate or prove mineral deposits.

“The Government has been asking us to invest and explore mining possibilities in lithium, cobalt, nickel - what are nowadays called as EV battery minerals. So we will begin exploration and feasibility of the reserves soon,” he said.

Australia and Chile are among the major producers of raw materials (for lithium-ion batteries), while China is the largest refiner. 

“We are open to acquisition of mines overseas too, if the opportunity arises,” he said. NMDC had previously explored acquisition opportunities for different minerals across African nations like Tanzania and Zimbabwe, but these did not materialise.

India’s import of lithium-ion batteries jumped 54 per cent y-o-y to $1.83 billion in the year ended March, sources say and almost 87 per cent of the purchases came from China and Hong Kong.

Published on August 14, 2022
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