New Delhi: State-owned iron ore miner NMDC, which is setting up a 3 MTPA steel plant in Chhattisgarh, hopes to start producing coal from its captive mine by 2014, coinciding with the commissioning of facility for the alloy.
In a recent presentation to the steel ministry, NMDC has said it is taking "all necessary steps" to start production from the Shahpur West block in Madhya Pradesh in 2014. Coal Ministry has already given approval to mine closure plan for the block.
The coal ministry had allotted two blocks - Shahpur East and Shahpur West in Shahdol district of Madhya Prdesh to NMDC in 2009. Following this, a Memorandum of Understanding (MoU) was signed between NMDC and Mineral Exploration Corporation (MECL) to carry out exploration in both the blocks.
"We have applied for environment and forest clearance and as per the approved mine plan, coal production is expected to start from 2014," a source in the company said.
Having a captive source of coal for its steel plant would help NMDC to hedge itself against price fluctuations, which is almost a certainty even in 2014 as the raw material is getting scarcer and costlier by day.
Domestic steel manufacturers, including Steel Authority of India, is continuously facing the heat of scorching coal prices in international market as its captive source can meet only a small part of the total requirement.
NMDC is setting up a three million tonnes per annum steel plant at Nagarnar in Chhattisgarh with Rs 15,525 crore outlay. It has placed all major orders including sinter plant, blast furnace, raw material handling systems, steel melting shop and oxygen plant among others.
Being a major iron ore producer itself, adequate supply to feed the steel plant is not a matter of concern for NMDC. The company aims to produce over 30 million tonnes iron ore in current fiscal, almost 20 percent more than in 2011-12 by enhancing production form the existing mines. It has plans to produce 40 million tonnes iron ore by 2014-15.
NMDC has also inked a MoU with Russia's Severstal to set up a three mtpa steel plant In Karnataka. However, this entity has plans to acquire a coal mine in Russia which would meet the fuel requirement for the steel plant.