NMDC, India's largest iron-ore miner, has announced an ambitious plan to double its production capacity to nearly 100 million tonnes (mt) by 2030-31. To achieve this, the company has earmarked a capital expenditure (capex) of Rs 50,000 crore. The investments will focus on mine enhancement, acquiring new mines, deeper drilling permissions, addition of equipment, setting up slurry pipelines, and expanding other allied facilities.
Amitava Mukherjee, Chairman and Managing Director (Additional Charge) and Director (Finance) of NMDC, stated that approvals are anticipated by the end of the next fiscal year, with approximately Rs 2,500 crore of capex expected in FY25. The capex will peak at around Rs 8,000-9,000 crore annually for three to four years, starting from FY27.
“We are on track to double production to 100 mt over the next five-odd years, around FY30/31, with a capex outlay of Rs 50,000 crore. Some approvals have been received, and we will float tenders for equipment soon, while some projects are in the Detailed Project Report (DPR) stage. We plan to get all the necessary approvals – board level, environmental clearances, and even ministerial approvals – by next year. Capex peaking at around Rs 9,000 crore a year will occur for three to four years starting from FY26,” Mukherjee said during the earnings call.
In addition to expanding existing mine capacities, NMDC will also bid for and acquire new iron-ore mines. Other capex plans include setting up conveyor belts (Rs 1,000 crore), slurry pipelines (Rs 10,000 crore), pellet plants (Rs 2,000 crore), and building stockyards (Rs 10,000 crore), with consultants like Deloitte, McKinsey, and BCG engaged in these projects.
Production Guidance
NMDC operates mines in Chhattisgarh and Karnataka. In FY24, NMDC's iron-ore production was over 45 mt. The company has guided an 11% increase in production to 50 mt for FY25 and an additional 8 per cent increase to 54 mt for FY26.
“Incremental additions to iron-ore production will come from both Karnataka and Chhattisgarh mines, with required permissions (including environmental clearances) for ramping up production to 53 mt already obtained,” Mukherjee said. “Beyond FY26, we have not yet worked out the production guidance.”
Mukherjee expects strong demand for iron ore, driven by improving domestic steel consumption. Iron ore is a critical feedstock for steel production. Besides NMDC Steel, major steel producers such as JSW and JSPL have already sought additional supplies from NMDC’s mines.
“Our large clients, JSPL and JSW, have requested additional supplies. We are currently meeting 60 per cent of JSW's demand and 80 per cent of RINL's demand, but we are unable to fulfil JSPL's additional requests,” he added.
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