The National Mineral Development Corporation is expanding its business in Karnataka and Chhattisgarh and increasing its presence in the fields of coal, rock phosphate, lime stone, gold and diamond. Despite its expansion plans in steel making and other value-added products, Narendra Kothari, CMD, tells FE's BV Mahalakshmi that the Indian mining industry has been facing a critical phase in the last two to three years. Excerpts:
Being the single largest producer of iron ore in the country, what are your expansion and investment plans for the next five years?
NMDC has grown to become a major Indian iron ore supplier both for domestic and international markets. We have achieved a record iron ore production from 30 million tonnes (MT) and sales of 30.5 MT for the year 2013-14. We have plans to increase iron ore production to 50 MT in the next five years. In the process, we are developing new mines – Bailadila-11/B in Chhattisgarh and Kumarswamy in Donimalai in Karnataka besides expanding the production capacity of existing mines.
Our turnover stood at Rs 12,058 crore, which is higher by 13% compared to Rs 10,704 crore which was due to higher production and sales quantity by 4.23 MT. We have set aside a capex of Rs 2,518 crore for this year and have plans to spend about Rs 3,495 crore in FY14-15. Currently, we are producing around 22% of the country's iron ore production and have set a target to achieve 50% by 2019-20. This would entail an expenditure of Rs 3,500 crore for the company. For this year, the production target is to cross 31 MT of iron ore and 32 MT of sales.
Besides your focus on domestic market, how about acquisition of overseas assets?
We are exploring all options for acquiring assets in the overseas markets. We have started due diligence in Indonesia for coal, rock phosphate assets in Russia besides some assets in Australia and Mozambique.With Rs 18,000 crore cash in hand, we are seriously looking at expanding our existing plants besides tapping the acquisition route.
What are the issues plaguing the mining industry at the moment?
India is one among the top countries in terms of production of some minerals like iron ore, bauxite, coal, etc even while it lags behind in some minerals like potash, heavy minerals, etc. We need to increase steel production from the present level of 81 MTPA as compared with