In an interaction with Amitava Mukherjee Director Finance and Chairman and Managing Director (Additional Charge), NMDC Ltd
Huge Investments To Pave The Way For Growth
NMDC Ltd. a Navratna public sector enterprise under the Ministry of Steel, Government of India is the single largest producer of iron ore in India. It owns and operates highly mechanised iron ore mines in Chhattisgarh and Karnataka and has its registered office at Hyderabad, Telangana. NMDC is considered to be one of the low-cost producers of iron ore in the world. It also operates the only mechanised diamond mine in India at Panna, Madhya Pradesh. In this interview, Amitava Mukherjee, Director Finance and Chairman and Managing Director (Additional Charge), elaborates about the company’s thrust on investments to expand and grow
What are the key factors influencing the capex target range of ₹2,000 crore to ₹2,500 crore for the current financial year?
In the capex target range for FY25, the key commitments are towards the slurry pipeline from Bacheli to Nagarnar and Screening Plant III at Kirandul, together an investment of ₹1,200 crore. Close to ₹600 crore will go towards mine infrastructure and equipment planning and another ₹100 crore is earmarked for township development in Kirandul and Donimalai. NMDC’s capex plans will be in pursuit of building a 100 million tonne production capacity by 2030.
We plan to make a massive capital investment in the journey from 45 MT to 100 MT in the next five to six years for mine enhancement and expansion of every facility in our supply chain. Building the production and evacuation infrastructure that will underpin the narration to 100 MT includes some ambitious projects which are underway, as for example, slurry pipeline, pellet plants, beneficiation plants and setting up a stockyard network.
How does NMDC plan to achieve the target of 50 million tonnes of production in the current financial year?
NMDC currently has a production capacity of 50 million tonnes. Our iron ore mines in Bacheli, Kirandul, and Donimalai have delivered their highest ever volumes in FY24 and entered this financial year performing at their very best. Investment in production and evacuation capacities, digital infrastructure, equipment and manpower planning will play key roles in our guidance to the 50 million tonnes production target. Our plan is to ensure that the three key players in mining, namely, manpower, machinery and material are in peak form as we progress into the second quarter of this financial year.
NMDC has come a long way on its digital journey – ERP, business intelligence, data analytics and management dashboard for production and sales planning are up and running. They carry information from the pit to the boardroom in real time and draw the big picture for us to make informed and effective decisions. In our experience, at the heart of every milestone is the workforce. It is the men and women of the company who breathe life into modern machineries and digital networks. Ours is a committed team and we are confident that NMDC’s road to 50 MT by FY25 and 100 MT by FY30 will be paved by them.
What is the company’s long-term outlook for iron ore exports?
India’s appetite for iron ore is on a historic high and we are scaling up production to meet the rising demand from domestic steelmakers. Economics of export for a while have been such that even though iron ore export prices are showing an increasing trend, the net sales realisations in the domestic market are superior. However, we do recognise the commercial value of an international market presence. NMDC is open to exploring promising global opportunities. In the long term, we are keen on expanding our customer base in the markets at home and away, especially as we make headways to 100 million tonnes.
What are the key factors driving the increase in HRC (hotrolled coil) production at the NMDC steel plant?
The NMDC steel plant is a modern sophisticated state-of-the-art plant, designed to operate at the highest level of productivity and efficiency. We at NMDC are very proud of the calibre and capabilities of NSL. It recently achieved the milestone of 1 million tonne production in a record time of 226 days. The boom in HRC production is rooted in the strong demand for hot-rolled coil. This demand for high-grade steel is growing everyday as the automotive, construction and infrastructure sectors grow.
The quality stamp of NMDC and competitive pricing are making customers queue up for the high-grade steel produced at NSL. This ecosystem of thriving demand and supply cycles is a key driver of increased production. The plant also has a big geographic advantage, benefitting from its strategic iron ore supply linkage with the Bailadila mines, located just 100 km away from Nagarnar. This proximity ensures a steady and costeffective supply of raw materials, enhancing the production capacity and efficiency of NSL.
How does NMDC’s social commitment translate into its community engagement initiatives and practices?
At NMDC, CSR is a thoughtful investment in initiatives that can bring a transformative and lasting impact. We are committed to contribute to social and economic growth, preserve the culture and environment, and build a better and brighter future for those living around our mines.
What makes the social initiatives of NMDC unique is that we identify the needs of people and pain points of communities through engagement with local representatives and then come up with CSR interventions.
Recognised as a model public sector enterprise in CSR, our stakeholder consultation mechanism has been endorsed by the Department of Public Enterprises for emulation by other CPSEs as well. Our flagship social initiatives such as Shiksha Sahayog Yojana and Balika Shiksha Yojana have empowered the dreams of thousands of tribal girl children with scholarships for higher education and nursing education, making them agents of change in their communities. It is this approach that gave way to the education city, hospital on wheels, sports academies and building infrastructure that ensures education, healthcare and opportunities for all.