HYDERABAD: The commissioning of state-owned miner NMDC Limited's Rs 21,000 crore three-million tonne capacity steel plant in Chhattisgarh, targeted this year, has been delayed due to COVID-19 and is now expected by July next year, a top official said on Tuesday.
Experts from foreign countries, engaged in the project work, could not undertake a visit for an inspection and clearance in view of COVID-19 travel restrictions, the city-headquartered NMDC's Chairman cum MD Sumit Deb said.
Senior officials of the PSU had earlier indicated that the plant would be operational this year. Replying to shareholders' queries at the virtual Annual General Meeting, Deb said that NMDC has so far invested Rs 16,000 crore in the plant and the total cost would be Rs 21,000 crore once completed.
Nagarnar Steel Plant's targeted date was this year but due to COVID-19 impact foreign experts could not visit the plant. "Now the revised target is it will start by July 2021," he said. He also said the company planned to take some debt also before commissioning the activity. "The plant is on the verge of completion. We have some balance work which will be taken up," the official said.
According to him, the steel plant is expected to generate annual revenues of Rs 14,000-Rs 15,000 crore (at the optimum production levels) with EBITDA (Earnings before tax depreciation and amortisation) margins of 15-20 per cent.
Replying to a question on the demerger of the steel plant, Deb said the Board of Directors has already given the clearance with mirror shareholding. Deb said that NMDC normally invests about Rs 2,000 crore towards capital expenditure. However, this fiscal it would slightly reduce to Rs 1,860 crore.
Earlier in his speech, he said NMDC has been in discussions with both the Karnataka government and the Centre on Donimalai Mine lease extension to resolve certain unviable terms in the lease agreement. On September 15, the state Cabinet cleared the company's application for starting mining operations at Donimalai.
However, the actual resumption of mining operations in Donimalai mines is expected to be started in the month of October, 2020 which will add production of 5-6 lakh tonnes per month, the CMD added.