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The largest iron ore miner in the nation, NMDC, has set aside ₹50,000 crore for capital expenditures in anticipation of doubling production to 100 million tonnes (MT) over the next five to six years. The investments will be used to improve the mine, such as requesting authorisation for deeper drilling, new mine bids and acquisitions, equipment additions, slurry pipeline installation, and growth of other allied facilities.
According to Amitava Mukherjee, chairman and managing director (additional charge) and director (finance) of NMDC, approvals are anticipated by "next year-(fiscal) end." Around ₹2,500 crore of capital expenditure is anticipated in FY25. It is anticipated that capex will peak or bunch up to about ₹8,000–9,000 crore annually starting in the "year after next" for the "3–4 years," or FY27–30.
“So we are on track to double production to 100 mt over the next five-odd years, around FY30/31, with a capex outlay of ₹50,000 crore. Some approvals have been received and we will float tenders for equipment soon, while some projects are in the DPR stage. We plan to get all the approvals – board level, EC clearances, and even ministerial approvals – in place by next year. Capex peaking – around ₹9,000 crore a year – will happen for three to four years from the year after next (FY26),” he said during the earnings call.
In addition to expanding existing mine capacities, NMDC would consider bidding on and acquiring new iron-ore mines. The other part of the capex plans includes setting up conveyor belts (around ₹1,000 crore) and slurry pipelines (expected to cost ₹10,000 crore), pellet plants at ₹2,000 crore, and building stockyards (for which consultants like Deloitte, McKinzie, and BCG have been engaged) at a cost of ₹10,000 crore.
NMDC operates mines in Chhattisgarh and Karnataka. In FY24, NMDC iron-ore production stood at over 45 MT. In FY25, it guided for an 11% increase in production to 50 MT. FY26 production guidance is another 8% increase to 54 MT.
“Incremental addition to iron-ore production will come from both Karnataka and Chhattisgarh mines, and required permissions (including environmental clearances) for ramp-up of production up to 53 MT has been obtained,” he said. “Beyond FY26, we have yet not worked out the production guidance,” he added.
Mukherjee anticipates demand for iron ore to remain strong, especially on the back of improving domestic consumption of steel. Iron ore is a key steel-making feedstock. According to him, apart from NMDC Steel Ltd – the steel unit of NMDC, other big steel makers, JSW and JSPL, have already sought additional supplies from the PSU iron-ore mines. “So if you look at our large clients, JSPL is asking for additional supplies, which we are unable to provide; for JSW, we are supplying 60% of their demand and 80% of RINL’s demand,” he added.
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