NMDC to invest Rs18,000 crore, enter spot markets2 min read . Updated: 24 Sep 2007, 04:02 PM IST
NMDC to invest Rs18,000 crore, enter spot markets
New Delhi: Domestic mineral giant NMDC Ltd will invest Rs18,000 crore over the next ten years for business expansion and said it will enter the spot market within the next two months for selling some of its iron ore.
“We will invest about ₹ 18,000 crore within the next ten years to augment our production, besides setting up sponge iron and pellet plants along with others," NMDC chairman and managing director B Ramesh Kumar told PTI here on 24 September.
The company has planned to invest nearly Rs4,000 crore to boost its iron ore production to meet growing demand from domestic steelmakers. “From a production of 27 million tonnes last year, we will ramp up capacity to 50 million tonnes by 2014-15," he pointed out.
“Moreover, we are planning to enter the spot market for trading some portion of our iron ore within the next two months," Kumar, whose company recorded a profit of Rs3,498 crore last year, said.
He, however, did not specify as to how much ore would be earmarked for spot market trading.
“With the growth of steel sector in the country, the demand for iron ore has also correspondingly increased. We, being the leading merchant mining company, will have to ensure that we are in a condition to adequately meet the needs of our existing and potential customers," Kumar said.
NMDC has also evinced keen interest in joining the Special Purpose Vehicle being planned by Steel Authority of India Ltd, Coal India Ltd and Rashtriya Ispat Nigam Ltd for acquiring coal properties abroad to meet the demand for coke in steel plants. “The proposal is awaiting the Union Cabinet’s clearance," he said.
Kumar was bullish on the iron ore market and said it would continue its upward spiral for the next two years. “Well the commodity cycle is high and I expect it to remain upwardly mobile for the next two years," he said.
The executive said his company was finalising plans to approach the court on allocation of Bailadila-I and Bailadila-II deposits to Tata Steel and Essar Steel. “We were applicants in Bailadila-I and had mining rights in Bailadila-III and we are rightful claimants," he said.
Kumar said NMDC has requested the Chhattisgarh government to consider its request for granting mining rights of Bailadila-IV deposit. “I have formally conveyed my request to the state government in this connection," he said.
The mineral giant is also looking at opportunities for acquiring mineral rights in the Kingdom of Lesotho in southern Africa and has decided to float a subsidiary in that country as required by its laws. The Indian government has also accorded its approval to allow it open a office in Lesotho.
Besides, the company would sign a MoU with the Railways, Chhattisgarh government and SAIL for taking up broad gauge rail link between Dalli-Rajhara and Jagdalpur in the state.
The firm suffered a production loss of 8.5 lakh tonnes amounting to Rs155 crore in Chhattisgarh last fiscal and about 7.5 lakh tonnes in the current fiscal for various reasons, he added.