NMDC set to mop up Rs 300cr next fiscal

Production of iron ore from Bailadilla mines to boost revenues

Due to burgeoning demand for iron ore in both the international and domestic markets, state-owned National Mineral Development Corporation (NMDC) is expecting an additional revenue of about Rs 250-300 crore next fiscal through the production of iron ore from Bailadilla mines.

During the last fiscal, NMDC dispatched 152 lakh tonnes of iron ore from Bailadilla mines, and in the current year it is expected to touch the 155 lakh tonne mark due to the growing demand for iron ore.

Besides increasing the iron ore dispatches from Bailadilla mines in the next fiscal, NMDC has decided to hike the iron ore prices substantially from 1 April for the next fiscal.

"In the international market iron ore prices have increased by more than 100 per cent and in the domestic market, Bailadilla ore consuming steel units have increased the steel prices significantly. Therefore, we have decided to hike the ore prices for both domestic and international parties," senior official from NMDC told Business Standard .

At present, NMDC is supplying around 38 lakh tonnes of ore to the state-owned MMTC for exports, 55 lakh tonnes to Visakhapatnam Steel Plant, 44 lakh tonnes to Essar Group's Vizag-based Hy-grade Pellets Limited, 16 lakh tonnes to Ispat Industries Limited and around six lakh tonnes to Vikram Ispat Limited from Bailadilla Mines.

NMDC is getting, on an average, $23 per tonne of iron ore from Japan, under a long-term contract. But during this fiscal, NMDC has exported around 3.5 lakh tonnes of Bailadilla ore on its own to China at the rate of around $58 per tonnes. At the existing prices, NMDC is earning around Rs 1,100 crore on iron ore dispatches from Bailadilla Mines.

From the next fiscal NMDC is going to increase the ore prices. In price negotiations, iron ore buyers from Japan have already agreed to pay 15 per cent more when compared to the current year's prices, sources said.

For domestic consumers also, NMDC is planning to increase ore prices by Rs 200-400 per tonne depending on the quality and grade of the ore. NMDC has already intimated the proposed price hike to domestic parties.

With this proposed price hike, NDMC is expecting additional revenue of about Rs 250-300 crore during the next fiscal, when compared to the current year earnings on Bailadilla iron ore mines.