NMDC To Invest Rs3K Cr To Set Up Pipeline (06-Jul-2010)
India's largest mining company NMDC plans to invest Rs3,000 crore to set up a 12 million-tonne per annum pipeline out of Chhattisgarh in a bid to improve iron-ore evacuation, which was hit after a Naxal attack last year severely damaged the product pipeline.
"We will set a 424 kilometre pipeline between our Bailadila mines in Chhattisgarh and Vizag port to help in evacuation of products that are affected due to damage to the existing pipeline," said Rana Som, chairman and managing director of NMDC.
"The capacity of the pipeline will support our expansion in the Bailadila region where production will rise from the current 22 to 23 million tonne to around 40 million tonne in the next four to five years. It will help our domestic customers like RINL and Essar Steel," he said.
The proposed pipeline, which will run along the existing highways, is expected to be complete by October 2012. NMDC is finalising a contractor that will operate the pipeline on behalf of the company.
Talking about the performance of the company, Mr Som said that NMDC may clock all time high sales of around Rs2,400 crore in the first quarter of current fiscal (2010-11) despite bottleneck in evacuation. This will largely come due a hike in iron ore prices and a 20% increase in sales volume, said Mr Som. The profitability (both pre and post tax) of the company is also expected to rise by 80%.
NMDC, which is also planning to set up two steel plants, is also scouting for a partner for its proposed two million-tonne steel plant in Karnataka.
The average price realisation of iron ore has also gone up this year to about Rs3,329 per tonne against Rs2,161 per tonne in 2009-10.
Meanwhile, Mr Som said he had important meeting with officials of ArcelorMittal last week over forging partnership for latter's iron ore mining project in Senegal. The companies are presently undertaking studies for developing the Faleme iron ore mines for which ArcelorMittal had entered into a pact with the Senegal government in 2007. The mines have estimated reserves of 750 million tonne of iron ore.
On pricing, Mr Som said that under the new system, the price of ore for domestic consumers has increased by 14% from July 01, 2010 against 26% rise in prices for the second quarter globally.
At 10.14 am, NMDC was trading at Rs265 up by 0.74%, with a volume of 0.81 lakh shares on the BSE.
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