HYDERABAD: With its plan to commission Nagarnar Steel Plant in Chhattisgarh by the year-end, the National Mineral Development Corporation (NMDC) is primed to transform from a public sector mining company to a steel manufacturer.
Already, Rs 13,525 crore has been invested on the 3 Million Tonne per Annum capacity steel plant, out of the planned investment of Rs 15,525 crore. With the Indian market anticipating stress on iron ore prices, thereby putting pressure on iron ore miners, NMDC is making efforts to commission the steel plant at the earliest, as diversification and value addition from the plant will help the Navratna PSU to stay competitive and profitable.
“Standalone merchant mining is not as lucrative as it used to be, as steel producers are opting for captive mines as part of their backward integration strategy. Therefore, to stay relevant and add value, we are coming up with NMDC Iron & Steel Plant at Nagarnar. Besides ensuring value addition. it will boost our turnover hugely. While we have a turnover of about Rs 11,000 crore now, Nagarnar plant alone, at the existing steel prices and functioning at 60 per cent of its capacity, will add about Rs 9,000 crore per annum. So, our main focus is to commission this greenfield facility by the end of this calendar year. Most of the work has already been completed and it will start functioning by utilising 60 per cent of its capacity in the first year itself,” said N Baijendra Kumar, Chairman and Managing Director of NMDC, speaking to TNIE.
Rs 5,000 crore more investments are expected to go into the facility.
Forecasting that iron ore prices will be under pressure over the next couple of years as iron ore is set to flood the market due to termination of several mining leases in states like Odisha by 2020, Kumar said the promising steel market will provide new avenues for NMDC.
“Steel sector is picking up. Steel is such a sector which will continue to grow in our country, especially as India is at a lower rate of per-capita consumption. With presence and capacity in both iron ore mining and steel production, NMDC is all set to leverage its vantage position,” he said.
Besides the Nagarnar plant, Kumar said the company’s priorities in FY19 would also be in exploring new mines in a joint venture with Chhattisgarh Mineral development Corporation; diamond mining in Madhya Pradesh and setting up of a new steel plant in Jharkhand along with the government of that state.