Already saddled with stagnant production over the past four years and having failed to acquire any new domestic as well as overseas mine in recent time, iron-ore miner NMDC has now been asked by the Steel Ministry to advance its plans of achieving 100 million tonnes per annum (mtpa) production target by four years to 2020-21 from the original timeline of 2024-25.
NMDC during the last few years has channelised its energies into setting up a 3 mtpa capacity Greenfield steel plant in Nagarnar in Chhattisgarh, for which it failed to find a joint venture partner despite best efforts. Now it plans to go solo and start the plant by October 2016.
While the Nagarnar plant took most of its time, being part of the consortium Indian Coal Ventures ltd (ICVl) which was formed by PSUs like Coal India, NTPC, RINl and SAIl to scout for coking coal and thermal coal assets abroad, also consumed a significant part of its energies, without any significant success.
Being essentially an iron ore miner, industry sources pointed out that by focussing on the aforementioned non core activities, NMDC failed to acquire any iron ore mine either domestically or abroad during the past three to four years.
Now with its production target having been advanced by Steel Minister Narendra Singh Tomar during a review meeting of the company's performance held earlier this week, industry sources said that it is too ambitious a target to achieve for the State-owned iron ore major considering its slow pace of production since 2010-11 and lack of focus on its core activity.
NMDC's current production is 30 mtpa, while in 2010-11 it was 25 mtpa. With this kind of a sluggish growth in production, Tomar has also asked the company during the review meeting to achieve 75 mtpa target by 2018-19.
While official sources claimed that NMDC has chalked out an ambitious plan to achieve this goal, there does not seem to be any real clarity on exactly how the company is going to achieve it, as it is currently only planning to expand the capacity of its existing mines located in Bailadila and Donimalai.
In such a scenario, industry watchers said that it is going to be a real challenge for the country's major iron ore supplier to reach the suggested targets within the stated timelines.
Apart from advancing its production targets, the Steel Ministry has also asked NMDC to ensure the raw material for the domestic steel industry at reasonable prices. "After due deliberations, it was decided that NMDC will increase production every year to reach the target of 75-100 million tonnes. It was also decided to incorporate this target in the MOU that the company signs with the Government," a statement issued by the company after the review meeting had stated.
Tomar had also underscored the fact that raw material availability at reasonable prices was essential for economic development of the country. Sources said that NMDC till now was solely relying on expanding the capacity of its existing mines in Bailadila and Donimalai to reach 65 mtpa by 2018-19 and 100 mtpa by 2024-25. However with the target of achieving 100 mtpa now having been advanced, it would be difficult for the company to achieve it without having any fresh mine at its disposal.