New Delhi: India’s leading state-run miner, National Mineral Development Corp. (NMDC), is looking for iron ore resources overseas to meet a likely spike in demand from steel firms.
The Union government expects annual steel production to top 124 million tonnes (mt) by 2012, with several major foreign players and local firms looking to expand or begin operations in Asia’s third largest economy.
“We are planning to step outside of India, particularly for iron ore,” Rana Som, NMDC’s chairman and managing director said in a telephone interview on Wednesday. Som said the company’s iron ore production in the fiscal year ending March was estimated at 30mt and is expected to rise to 32mt by fiscal 2009. “I feel that the situation in iron ore will become more and more tight as our steel production will grow by more than double in the next four to five years,” he said.
“I don’t think iron ore production would double during the same period.”
Steel output in India during the fiscal year ending March is likely to be 55.5mt, according to government figures.
The world’s No. 1 steelmaker ArcelorMittal and South Korea’s Pohang Iron and Steel Co. (Posco) are among those looking to build in India, where the government expects the economy to grow at close to 9% in fiscal 2008.
Annual iron ore production in India is estimated at 170mt, and the nation’s total iron ore reserves are seen at 25 billion tonnes. NMDC, which accounts for about 15% of iron ore production in India, operates three mines—two in Chhattisgarh and one in Karnataka. Som said the company had applied for eight mining leases in Karnataka and another in Orissa.
“But wherever there are mining leases available, the tussle between various parties is very intense,” he added. “We have been pressing the state governments saying that every ounce of mining material extracted by us is done without wastage.”
Som said prospecting work on a gold mine in Tanzania is underway. “Hopefully within a year, we would get a gold mining map and after that we will apply for a prospecting lease and set up a unit,” he said.
The company has taken eight prospecting leases for diamonds in Andhra Pradesh, Som added. “We are going to start prospecting work shortly,” he said. The only other diamond project in India is at Panna in Madhya Pradesh but it has been closed for two years on government orders.