NMDC to spend Rs 3,000 cr on Chhattisgarh steel plant in FY'14
New Delhi: State-owned iron ore producer NMDC will spend around Rs 3,000 crore next fiscal on its maiden steel venture at Chhattisgarh's Nagarnar, which has planned capacity of 3 million tonne.
According to Budget documents, the top iron ore producer has kept capital expenditure target of Rs 4,084 crore for 2013-14. Of this, nearly 75 percent will be spent on the Chhattisgarh steel plant.
"We have placed orders over Rs 12,000 crore and all the contractors are working. The plant will be commissioned on time in mid-2015," NMDC's Director (Finance) S Thiagarajan said.
NMDC is funding the entire investment for the project, estimated at Rs 15,525 crore, through internal resources. The plant will initially produce HR-coils (hot rolled coils) and the company will have a separate marketing division for selling the steel products.
The plant will get iron ore from company's existing mines at nearby Bailadila, while the coking coal is planned to be imported. Besides, it also has plans to set up a 500 MW power plant to meet the electricity requirements of the steel plant.
Of NMDC's planned capex for this fiscal, about Rs 1,084 crore is to be spent on existing iron ore mines and related projects, including Bailadila and Kumaraswamy mines and pelletisation plant at Donimalai in Karanatka, according to the Budget documents.
However, the iron ore miner is likely to miss its capex targets for the current fiscal by about 35 percent at Rs 2,814 crore. The original capex for the ongoing financial year ending next month was at Rs 4,655 crore.
When asked about missing the capex targets, Thiagarajan said that "some environment and forest clearances did not come on time at Donimalai and Bailadila mines. This has led to revising the estimates".
NMDC's major iron ore reserves are located at Bailadila in Chhattisgarh and Donimalai in Karnataka. The company has plans to increase its capacity by 50 percent to 48 million tonne (MT) by 2015, and is constructing a slurry pipeline to evacuate 8 MT ore from the Bailadila region.