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NMDC, Chhattisgarh to float joint venture for iron ore mining

NMDC, Chhattisgarh to float joint venture for iron ore mining
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First Published: Mon, Sep 03 2007. 12 56 AM IST
Updated: Mon, Sep 03 2007. 12 56 AM IST
The public sector mining giant National Mineral Development Corp. Ltd (NMDC) will float a joint venture company with the Chhattisgarh Mineral Development Corp. Ltd (CMDC) for iron ore mining in the Bailadila region of Chhattisgarh.
The move is aimed at ensuring adequate iron ore supplies to the steel plants that are being aggressively encouraged by the Chhattisgarh government both in the public and private sectors, NMDC chairman and managing director B. Ramesh Kumar said.
He told mediapersons here that NMDC has signed the shareholders’ and joint venture agreements with CMDC and the joint venture company would be incorporated shortly.
The joint venture company would develop Bailadila iron ore deposit No. 13 into a modern mine. NMDC would hold 51%, while CMDC proposes to hold 49% in the venture.
In case CMDC is unable to bring in its equity contribution, NMDC would pump in the required equity and up its holding in the venture as per the agreement.
“The investments required for mine development is estimated roughly at around Rs1,500 crore,” Kumar said.
The exploration exercise of Bailadila iron ore deposit No. 13 is completed and the iron ore reserves are expected to be in the range of 300 million tonnes (mt).
The NMDC chairman added that the iron ore production from the Bailadila iron ore deposit No. 13 would be supplied on priority to the steel and sponge iron units in Chhattisgarh and then to other units in the country.
Further, priority would be given to the steel facilities coming up under the public sector as joint ventures of NMDC, Steel Authority of India Ltd (SAIL) and Rashtriya Ispat Nigam Ltd (RINL), he said.
Last month NMDC had signed a memorandum of understanding with SAIL and RINL to set up a 4mt per annum integrated steel plant in Chhattisgarh, using the main raw material of iron ore from Bailadila.
It had also singed a memorandum of understanding with RINL to set up a pelletization plant. Further, NMDC is also setting up a sponge iron plant of 100,000 tonnes per annum capacity with a 10MW power facility in Chhattisgarh.
As against the global iron ore production of 1,500mt in 2006-07, India’s contribution stood at 176mt, accounting for 11.73%. The contribution of NMDC to the national production amounted to 27.07mt, or 15.73% of the country’s total production and 1.8% of global production.
The worldwide trade of iron ore was about 768mt, while India’s exports were 93mt or 12.1%. “With the objective of meeting the requirements of domestic customers, NMDC restricted its exports to 3.29mt only or 12.2% of production” during 2006-07, Ramesh Kumar said.
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First Published: Mon, Sep 03 2007. 12 56 AM IST