NMDC to collaborate with Rashtriya Ispat

Mulls steel making/sponge iron plant in Bailadilla sector

National Mineral Development Corporation Limited (NMDC) proposes to collaborate with Rashtriya Ispat Nigam Limited (RINL) for setting up a steel making unit or a sponge iron plant in the Bailadilla sector of Chattisgarh.

Both the public sector undertakings are finalising a joint venture agreement for this purpose.

According to NMDC chairman and managing director B Ramesh Kumar, "Value addition is the new mantra that the state governments are chanting while allotting or renewing mining leases."

By collaborating with RINL to set up a unit, NMDC can obtain additional mining leases and increase its iron ore production while RINL can increase its steel making capacity. The increased production of iron ore can feed RINL plant and contribute to value addition in Chattisgarh.

Kumar said that the Chattisgarh government was also evincing interest to join hands with NMDC in the development of Bailadilla deposits and the modalities were being worked out in this regard.

Stating that the last year's China-driven high demand for iron ore was continuing even in the current year, he told newspersons that NMDC had chalked out expansion plans to increase its production levels.

The plans, involving an investment of Rs 1,500 crore, included development of new mines and augmentation of iron ore production in the Bailadilla and Bellary-Hospet sectors.

NMDC, at its annual general meeting held on July 29, 2005, has declared a dividend of 114.5 per cent for 2004-05 , as against 35 per cent paid in 2003-04. The corporation earned a net profit of Rs 755.44 crore last fiscal. The corporation could earn huge profit partly due to price rise on account of a spurt in demand for iron ore.

As the demand for iron ore continued to be high, NMDC posted a 21.85 per cent higher sales turnover of Rs 574.19 crore and a 44.5 per cent increase in net profit of Rs 237.13 crore during the quarter ended June 30, 2005 as compared to the turnover of Rs 471.23 crore and a profit after tax of Rs 164.11 crore registered during the corresponding quarter of the previous year.