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NMDC plans Rs. 3,000 cr. investments

KOLKATA: The Hyderabad-based NMDC is planning to invest between Rs. 1,200 crore and Rs. 1,500 crore each in Karnataka and Chhattisgarh to set up two units, each with a capacity of five lakh tonnes for making pig iron from the slime and fines that NMDC mines now generate.

Rana Som, Chairman-cum-Managing Director, said this was part of a forward integration project for the company which was looking at various value-addition projects, including expanding into other minerals like gold.

On plans for gold mining, he said that while domestically the company had received an offer from the Karnataka Government for a joint venture with the State-owned Hutti Gold Mines, overseas blocks had been taken in Tanzania where an Irish company would do the prospecting.

He said the company had zeroed in on a likely technology partner for the pig iron project and officials would be visiting Rio Tinto of Australia in this regard soon.

Mr. Som was participating in an interactive session organised by the Indian Chamber of Commerce.

He said that while NMDC was a well-performing public sector company, it faced the problem of not getting new iron ore mines.

It was now scouting for reserves abroad and had received an offer for a mine in Canada. Production in 2008-09 would be about 10 per cent higher than the 30 million tonnes being projected for this fiscal. At present, two mines were being developed. These were in Chhattisgarh and Karnataka and once fully developed, would add another 15 million tonnes, he said.

He said 80 to 85 per cent of the output was sold through long term contracts and the remaining through spot prices.

He however discounted the notion that steel production in India may suffer due to iron ore shortage, saying that the great problem area was coking coal shortage.

Mr. Som said measures were afoot to take-over the Sponge Iron Company of India which might be merged with NMDC by March.

This would be a Rs. 150 crore buyout and the Cabinet note had been circulated already. The company is also planning to increase its visibility in the stock markets (it has 1.6 per cent shares in the market) by going in for a stock split.

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