National Mineral to spend Rs135 bn on iron ore, steel

National Mineral to spend Rs135 bn on iron ore, steel
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First Published: Mon, Apr 09 2007. 01 29 PM IST
Updated: Mon, Apr 09 2007. 01 29 PM IST
By Debarati Roy/Bloomberg
Mumbai: National Mineral Development Corp., India’s biggest state-run iron-ore producer, said it will spend a total of Rs135 billion ($3.2 billion) to raise output, build steel and iron plants and invest in coal mines overseas.
The company, based in Hyderabad, will invest Rs35 billion to raise iron-ore production by 85%, Chairman B. Ramesh Kumar said on 7 April. A further Rs90 billion will be spent on iron, steel and power plants, while Rs10 billion would be earmarked for coal-mine purchases.
Indian iron-ore miners and steelmakers are boosting output to feed rising demand for steel as the nation uses more of the metal in buildings, cars and appliances. Asia’s fourth-largest economy has grown 8% annually in the past three years.
National Mineral currently produces about 27 million tonnes of iron ore a year, which would rise to 50 million by 2015, the statement said. The company also plans to set up a 2 million tonne steel plant, two pellet plants and a sponge-iron plant in the central state of Chhattisgarh, and a 300 megawatt power plant in the southern-state of Karnataka.
“We are in discussions with companies like Steel Authority and Rashtriya Ispat Nigam to partner us for the steel plant,” Kumar said. “We have received approval for all these projects.”
The company will invest Rs10 billion in a so-called special purpose vehicle, which would be set up with four other state-owned companies, including NTPC Ltd, to bid for coal mines overseas, Kumar said.
NPTC is India’s largest power producer, Steel Authority is the largest state-run steelmaker, and Rashtriya Ispat Nigam is a state-run maker of wire rods, bars and billets.
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First Published: Mon, Apr 09 2007. 01 29 PM IST
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