1. NMDC: An overview
NMDC Limited, operating in the Mining and Mineral sector since November 1958, is one of the highest profit-making Navratna public sector companies under the Ministry of Steel. NMDC has extensive experience in the exploration of a variety of minerals including iron ore, copper, rock phosphate, limestone, dolomite, gypsum, bentonite, magnesite, diamond, tin, tungsten, graphite, beach sands etc.
NMDC Ltd is the largest iron ore mining company in India, with an average annual production ramping up to over 40 MT over the year. With iron-ore production of around 42.19 million tonnes in FY22, it contributed to around 18% of domestic production (excluding captive iron ore production). At an average of 64% Fe, NMDC sells one of the best grade Iron ore globally. The organization produces different variety of ores in terms of grade & size, to suit the requirement of its customers.
NMDC has plans to increase the production capacity from its three mining complexes from the existing 46 MTPA to 67 MTPA in the near future to meet the growing requirements of iron ore of the Indian Steel Sectors. The Company is also focused to diversify from the existing business of exploration and mining. NMDC has invested in the construction of a 3 MTPA integrated steel plant in Jagdalpur (Chhattisgarh) and a 1.2 MTPA pellet plant in Donimalai (Karnataka). NMDC has also ventured into the mining of coal through the allocation of two coal blocks in Jharkhand on nomination basis by the Government of India. NMDC is planning to start Tokisud North Coal Mine in Jharkhand in FY23.
The company immensely focusses on productivity improvement as well as cost optimization which results in high profitability for the organization. NMDC has made highest ever revenue of Rs 25882 crores, with a growth of 68.39% over last year. NMDC recorded a Profit (before tax) of Rs 12981 crores in FY21 and a net worth of Rs 34,844 crores (as on 31st March 2022). NMDC has a strong history of rewarding investors with an average dividend payment of around 752.19% in the last 5 years, which is the testimony to consistently creating value for its stakeholders.
NMDC continues to pursue policies and programmes to deliver long term value to all its stakeholders. NMDC has also invested substantially in the socio-economic development of the local communities, especially near its mining projects.
1.2 Operating Projects
NMDC operates three highly-mechanised iron ore mine complexes in the states of Chhattisgarh and Karnataka. Two of the complexes are located in Dantewada (Chhattisgarh) namely Kirandul Complex and Bacheli Complex, that produce around 30 MTPA. The third complex in Bellary (Karnataka), namely, Donimalai Iron Ore Complex produces 12 MTPA (from the two pits- Kumaraswamy & Donimalai). NMDC also has a 1.2 MTPA pellet plant at Donimalai.
NMDC also operates the Diamond Mining Project, Panna (M.P.), which is the only mechanized diamond mine in Asia.
Apart from the above, NMDC has wide presence across the country as shown in the map.
1.3 Global Presence
NMDC has Global presence in Australia and Mozambique through its Subsidiaries and associate companies. NMDC has over 90% equity holding in Legacy Iron Ore Ltd, based in Perth, Australia with a focus on Gold, Iron ore and base metals. NMDC holds about 26% stake in ICVL and Benga mine is one of the operational asset of ICVL in Mozambique.
1.4 Growth plan
• NMDC has made a comprehensive strategic management plan Vision 2025 to enhance iron ore production capacity to 67 MTPA to meet the growing requirements of iron ore in the Indian Steel sector. The strategy focuses on growth largely through brownfield expansion of existing mines and improving the evacuation infrastructure.
• NMDC is also actively pursuing an Iron Ore Production ramp-up plan to further increase its iron ore production capacity to 100 MTPA by FY30 from its existing mines and further to 100 MTPA from the acquisition of new mines through the reservation route. •
• NMDC also envisages expanding through the development of Deposit-13 & Deposit-4 (greenfield projects), under a Joint Venture company of NMDC Limited and Chhattisgarh Mineral Development Corporation (NCL).
• NMDC is in the process of setting up a slurry pipeline, along with an associated beneficiation plant & pellet plant, in phases for economical transportation of iron ore to locations from where the pellets /ore can be supplied to the industry. The construction of the Beneficiation Plant at Bacheli and 15 MTPA Slurry Pipeline from Bacheli to Nagarnar and 2 MTPA Pellet Plant at Nagarnar is likely to be completed by FY24.
• Efforts to increase evacuation capacity through doubling of Kirandul-Kothavalasa (KK) line is also in full swing and few completed sections have been opened for traffic. Out of 150 km of planned doubling of railway line, 76% of work has already been completed.
• NMDC has developed an intermediate iron ore stockyard at Kumarmaranga in Chhattisgarh for uninterrupted supplies to customers.
• NMDC is pursuing the allocation of new iron ore deposits both through participation in auction and reservation through government dispensation route (section 17A(2A) of the revised MMDR Act, 2015) for further expansion in capacity.
• NMDC had emerged as a preferred bidder for Chigargunta-Bisanatham gold block, Andhra Pradesh in the auction process conducted in July18, for which activities will be initiated post-issuance of LOI.
• Ministry of Coal has allocated two Coal Blocks namely Tokisud North Coal block & Rohne Coal Block on 17th March 2020 for commercial sale & captive purposes. NMDC has appointed MDO for Tokisud North Coal Block and planned to start its operations in FY23.
• NMDC is in the advanced stages of setting up a 3.0 MTPA greenfield Steel Plant at Nagarnar in Chhattisgarh, which is expected to operationalize in FY23. Commissioning activities started with the start of coke oven heating in Jan2022. Testing & trials are in progress in each package. Packages like operational power facilities, operational water packages, plant & instrument air packages are commissioned.
1.5 Exploration & Reserve Estimation:
• NMDC has a dedicated exploration wing at Raipur, fully equipped to undertake the exploration of minerals. NMDC has conducted more than 18,300 meters of core drilling in FY22, at existing mines and surpass all time drilling performance. NMDC is also conducting exploration in different blocks of Iron ore, Manganese, & Diamond in M.P. under MOU route. NMDC conducted 964 meters of drilling for Iron ore in Sidhi Block, Sidhi & Singrauli, Districts and 3882 meters drilling for Diamond in Madhya Pradesh. Besides, it has also established a well- equipped Centre for Geostatistics and has a Remote sensing lab at Corporate Office, Hyderabad. NMDC has full-fledged mine planning wings at Corporate office as well as at project sites for otebody modeling, reserve estimation, pit design & scheduling, with advanced software like Surpac, Whittle & Mineshed
1.6 Research & Development:
• NMDC operates a state-of-the-art Research & Development (R&D) Centre at Hyderabad, which has been declared as a "Centre of Excellence" by the United Nations Industrial Development Organisation (UNIDO). Recently R&D center has developed technology for dry beneficiation of iron ore using compressed air, and patent for same was filed in the year 2020 with application no 202041006098. The R&D Centre undertakes different projects to mitigate the operational challenges of different units of NMDC and provide solutions in terms of improvement in the system or change in technology, to achieve a continual enhancement in its processes & operations. The Centre provides solutions to external agencies as well. NMDC holds 21 patents for its innovations at R&D centre. NMDC innovation and incubation centre (NICE) launched with i-TIC foundation, IIT, Hyderabad and running successfully for last two years.
2. Industry Structure and Developments
• After facing the unprecedented impact of first wave of Covid-19, global economy has started recovering at a faster pace owing to the resumption in household spending, fiscal and monetary policy measures and extraordinary measures taken to fight new waves of Covid.
• World output growth has been 6.1% in 2021, highest growth rate since 1976. The global output has grown beyond 2019 level after contracting by 3.4% in 2020. Advance economies grew by 5.2% whereas emerging market and developing economies grew by 6.8% with India and China driving the overall growth with their high growth rate of 8.7% and 8.1% respectively.
• The global economy recovered rapidly in the first two quarters of FY 2022 due the impact of fiscal and monetary policy stimulus, pent-up demand and ease in supply side restrictions. However, in the last two quarters, the economic recovery slowed down as the stimulating effect of policy stimulus began to dissipate, inflationary pressure increased, geopolitical conflict intensified and supply side constraints grew.
• The prices of almost all the commodities grew in the first two quarters of FY 2022.
This was mainly due to the increase in demand - combined effect of increase in household demand and policy stimulus along with vaccine led reopening, and supply side constraints due to resurgence of new Covid waves, extreme weather events and logistical issues.
• Global economy has entered into 2022 in a weaker position than anticipated. Global growth is projected to decline from an estimated 6.1% in 2021 to 3.2% in 2022 and 2.9% in 2023. Advance economies are estimated to slow down from 5.2% in 2021 to 2.5% and 1.4% in 2022 and 2023 respectively. Whereas, emerging market and developing economies are expected to grow at 3.8% and 3.9% in 2022 and 2023 respectively much lower than 6.8% growth rate of 2021. India is expected to grow at 7.4% and 6.1% in 2022 and 2023 whereas China can face a slowdown with growth declining from 8.1% in 2021 to 3.3% and 4.6% in 2022 and 2023 respectively.
• Factors that will drive the near-term growth outlook are monetary tightening to curb inflationary pressure, volatility in financial market, fiscal withdrawal as space for government expenditure has been eroded in many countries, Chinese slowdown, impact of new Covid variants, geopolitical conflicts and easing supply side constraints.
Overview of World Economic Outlook Projections
|Emerging market & developing economies||3.60||3.90|
Indian economy, despite the recurrent waves of Covid, has grown at a rate of 8.9% in 2021 making it the fastest growing major economy in the world. The trend is expected to continue in future as well, as per the reports of IMF, which projects the growth to be 7.4% and 6.1% in 2022 and 2023 respectively.
The economy has recovered past the prepandemic levels. As per the Economic Survey report of 2021-22, Agriculture and allied sectors were estimated to grow by 3.9% in FY 2021-22 after growing at 3.6% in the previous financial year. Industry growth (including mining and construction) is estimated to be 11.8% in FY 2021-22 after a contraction of 7% in FY 2020-21. The service sector is estimated to grow by 8.2% in FY 2021-22 after showing a negative growth of 8.4% in FY 2020-21.
Total consumption has been estimated to grow by 7% in FY 2021-22. Export of both goods and services have been extraordinarily strong. However, the import has also recovered due to increase in domestic demand and higher commodity prices.
Overall, the macroeconomic indicators suggest Indian economy to remain stable.
The emphasis on the supply side reforms through policies and programmes such as PM Gati Shakti, simplification of regulatory and approval processes etc. and demand management through increasing capex by 35.4% in the recent budget, PLI scheme, Make-in-India campaign etc. is expected to drive the future economic growth.
As per Economic Survey report of 202122, the growth of mining and quarrying is estimated to be 14.3% in FY 2021-22 after a contraction of 8.5% in FY 2020-21. The share of mining and quarrying in the Nominal GVA is estimated to improve to 2.3% in FY 2021-22 from 1.6% in FY2020-21.
As per National Statistical Office (NSO),
Index of Industrial Production (IIP) grew by 11.4% in FY 2021-22 after contracting 8.4% in the previous financial year. Of the three sectors, mining sectoral IIP has registered highest growth at 12.2% in FY 2021-22 after a contraction of 7.8% in FY 2020-21.
There are few risks including the high inflation, impact of geopolitical conflict escalation, resurgence of more severe new Covid variant etc., which can affect the future economic growth of India. Moreover, the rising fiscal deficit of Centre as well as States and limitations on the monetary policy side leaves limited space to manage the economy in case of any further severe disruptions.
However, in near term the recovery of Indian economy is expected to remain strong.
The governments vision and well-planned initiatives are expected to drive the overall economic growth and control the downward risks that poses threat to Indian economy.
2.2 Iron Ore Industry Outlook:
Global: Steel & Iron Ore
> In 2021, even though many locations had Covid restrictions, most countries around the world have registered an increase in steel production as well as consumption.
> Total world crude steel production was 1951 MT in 2021, a growth of 3.8% from last years production of 1879 MT. The average growth in crude steel production between 2015 and 2020 remained at 3%. China, with around 53% share in global steel output in 2021, has produced 1032.8 MT of steel in 2021,
~3% lower than 2020 level. Rest of the major producers increased their production to compensate for the gap created by Chinese steel mills in the export market.
> In 2021, China, to restrict carbon emissions of the steel sector, has placed cap on the steel production to keep the steel output below 2020 production level. However, the steel output of Chinese Steel mills was 12% higher in the first half of 2021 making the decrease in the second half significant as the overall steel production in 2021 declined by ~3%.
> Due to rise in the demand of steel in the first half of 2021, owing to the government stimulus through increased infrastructure spending and faster economic recovery across many countries, and supply constraints due to Covid restrictions, increase in logistics costs etc., the prices of steel soared in the H1 CY 2021 peaking up in June 2021. The higher steel production resulted in higher demand for iron ore and coal whereas the supply disruption in Australia and other major raw material supplier due to extreme weather events and Covid restriction placed, has resulted in their prices also registering
a similar rise in the first half with prices peaking up in June 2021.
> However, the demand for steel fell in the second half of 2021 due to tough measures taken by Chinese government on their real estate sector, decline in demand from the automotive sector facing chip supply shortage and increase in fiscal deficit in many countries stalling their infrastructure stimulus packages etc. and supply improved as other major steel producers increased their output to compensate for Chinese steel supply shortage causing the prices fall in H2 CY 2021.
> As per world Steel Association, steel consumption is expected to rise by 0.4% in
2022, a slower pace than last year increase of 2.7%. The major reasons behind the slowdown includes Russia-Ukraine conflict which has led to contraction in demand from Russia, Ukraine and Europe, higher inflationary pressure causing many countries to move towards fiscal tightening which is expected to impact investments, continued slowdown in Chinese economy - real estate and urbanization etc. However, the demand from India, South East Asia and USA, majorly because of the infrastructure stimulus packages such as Gati Shakti in India, Bipartisan Infrastructure Law in USA etc., is expected to compensate the contraction from China, Russia, Ukraine and Europe.
> Iron ore demand is expected to remain rangebound following the consumption growth of steel in 2022. However, the demand for good quality ore is expected to increase further with countries more focused on cutting down emissions. On the supply side, contraction from Russia, Ukraine and India (increase in export duty) is expected whereas supply from Australia and Brazil is expected to rise.
> After a significant fall in 2020, Indias crude steel production reached 118 MT, the highest ever production, showing a growth of 17.8% over the production in 2020. The capacity of domestic crude steel expanded to 154 MT in 2021. Consumption has also grown to 106 MT and net export to 7.8 MT in 2021.
> As per the Economic Survey report for 202122, the cumulative growth rate for Steel sector in the Index of Eight Core Industries was 16.9% in FY 2022 over FY 2021 showing a significant increase.
> The major reason for the rise in demand was opening up of economy after Covid related disruptions, increase in Government as well as private consumption, rise in export especially in the first half of FY 2022 owing to global steel price rise and reduction in supply from China. Moreover, the Russia- Ukraine conflict has led to increase in steel prices at the end of FY 2022 and provided an opportunity to Indian steel players to increase their export to Europe and other countries.
> The production of crude steel rose significantly due to expansion of steel capacity, increased plant utilization rate etc. to meet the inflated domestic as well as global demand amid the supply cut from China.
> Iron ore mining sector also registered highest ever production figure of 251 MT in FY 2022, a growth of ~23% over the 203.8 MT production in FY 2021. Two top iron ore producers in FY 2022 included NMDC (42.18 MT) and OMC (26.05 MT). Export of iron ore in FY 2022 was 15.25 MT of which 98% of consignment went to China.
> Steel prices in India followed global trend to a certain extent. Both global and domestic steel prices increased to touch the top around May 2021. While the global prices peaked at that time and then showed a gradual decline, domestic steel prices showed a gradual increase with periodic ups and down to reach another top in April 2022. However, both global and domestic iron ore prices followed a similar trend which is coherent with the trend of global steel prices.
> India, being in the globalized world, has also been facing the impact of high inflation rate impacting the steel demand. Moreover, the increase in export duties on Steel, iron ore and pellet would impact the export. However, the increase in domestic demand due to increase in government expenditure through schemes such as Gati Shakti, National Infrastructure Pipeline (NIP), PM Awas Yojana and increase in CAPEX by 35.4% in the recent budget is expected to compensate for the decline in export.
> On the supply side, measures such as PLI scheme, FAME etc. are also expected to attract more investment in the steel sector. The expansion in steel capacity and improvement in profit margins of steel players would be a major driver. However, the present trend of low profit margin has led to contraction in the plant utilization. The situation can improve in future depending upon the relative decline in the input cost of iron ore and coal - peak demand from power sector has pulled the prices up, and steel and how the progress in the various government schemes drives the demand up.
3. NMDC - Opportunities & Threats
i) Envisaged growth in domestic steel production on account of the factors mentioned below would lead to higher demand for Iron Ore in the country:
• Infrastructure stimulus of the government to drive the growth and growth potential of the construction, automotive, consumer durables sectors etc. will drive the demand for the iron and steel sector.
• Supply gap created for Steel & Iron ore in the international market due to steel production curb in China, sanctions on Russia and damage to Ukraine in the war.
• Government initiatives for Self-Reliant India creating new avenues to set-up new industries leading to demand in steel
• Numerous foreign companies are setting up their facilities in India on account of various Government initiatives like Make in India and Digital India. This will further add up with the government initiatives for 100% FDI.
• The government envisages bringing Indias GDP to US$ 5 trillion by FY25 and achieve upper-middle income status on the back of digitization, globalization, favorable demographics, and reforms that will create demand for steel in the domestic market.
• Increase in demand for high-grade ore worldwide considering environmental concerns. NMDCs iron ore is one of the best grades of ore in the world.
• Continuous thrust by the government to use domestically manufactured iron and steel products in government procurement.
• Further capacity addition by steel players in near future, along with planned commissioning of NMDCs steel plant in Nagarnar.
ii) IMF projections of 7.4% GDP growth in 2022. Proposed CAPEX growth of 35.4% year on year to 7.5 trillion rupees. Production Linked Incentive scheme for specialty steel sector expected to attract addition investment of
Rs 40,000 Cr. PM Gati Shakti - National Master Plan for multi-modal connectivity to reduce the logistic costs. All are expected to drive the steel demand vis-a-vis iron ore demand in future.
iii) Allowing the export of iron ore from Karnataka and granting permission to the miners in Karnataka to enter into direct contracts without resorting to e-Auction will help NMDC increase its sales.
iv) Provisions under MMDR Act, 2021 such as grant/extension of mining lease for the government companies on the payment of additional revenue, transfer of statutory clearances valid till the expiry of ML will give NMDC competitive advantage over others.
v) Development of National Mineral Index could help in further driving the profitability and investments in metal mining sector.
i) Rising inflation can impact consumption and lead to fiscal tightening increasing the cost of borrowings affecting investments.
ii) Resurgence of new more severe variants of Covid can cause disruptions in the iron and steel market as well.
iii) Intensification of geopolitical tension in Europe can disrupt the whole market dynamics.
iv) Increase in export duties of iron ore, pellets can lead to decline in the prices of iron ore due to increase in domestic availability. Moreover, increase in export duties of some categories of finished steel can reduce the iron ore demand.
v) Demand for Iron ore may fall in the international market in long term due to the decline in the Chinese steel production, shift towards EAF/IF route for recycling scrap steel and development of new techniques such as hydrogen steel.
vi) New iron ore leases being auctioned and the recent amendments to MMDR Act allowing sale of 50% of the iron ore production of captive mines in open market may lead to increase in supply of iron ore and increase the competition in the market.
vii) Backward integration by Steelmakers into iron ore mining after the start of auctioned mines will affect the demand from the customers of the Company.
viii) Indian iron ore industry will continue to be uncompetitive on a global level due to higher rates of royalty and other levies such as DMF, NMET, Export duty etc. as well as significantly higher logistic costs.
ix) Increasing regulatory pressure on environment, health & safety and sustainability.
x) Disturbances due to Maoist activities in Bailadila region from where the majority of NMDCs production comes. At the same time, the location of Bailadila has a logistic disadvantage.
NMDCs business would continue to be affected by developments impacting the demand-supply scenario & price fluctuations of iron ore in both the global and domestic markets.
4. Segment-wise or Product-wise performance
4.1 Physical Performance of NMDC
|Production of Iron Ore WMT (In lakh tonnes)||355.76||323.61||314.89||341.50||421.88|
|Production of Sponge Iron (tonnes)*||NIL||2,475.37||NIL||NIL||NIL|
|Production of Diamonds (carats)||39,393.72||38,148.77||28,537.23||13,681.01||NIL|
|Production Pellets (in tonnes)||58,070||1,15,622.89||1,10,481.19||83,751.32||1,82,298.77|
|Sale of Iron Ore (in lakh tonnes)||360.75||323.56||315.14||332.52||405.64|
|Sale of Diamonds (carats)||33,175.34||29,345.54||33,722.99||22,248.84||25,219|
|Sale of Sponge Iron (tonnes)||Nil||495.58||1,943.88||NIL||NIL|
|Sale of Pellets (tonnes)||42,948||1,12,010||85,793||92,773||1,96,972|
4.2 Financial Performance of NMDC ( in Or.)
|Sale of Iron Ore||11,490.93||11,997.98||11,569.00||15,233.70||255,46.66|
|Sale of Diamonds||35.17||38.86||34.29||21.10||62.93|
|Sale of Wind Power||6.50||5.51||5.40||5.17||4.99|
|Sale of Sponge Iron||0.00||0.94||4.39||NIL||NIL|
|Sales - Others||56.91||32.86||30.59||36.59||45.10|
|Dividend as % of PAT||44%||36%||45%||36%||46%|
5. Outlook for NMDC
NMDO proposes to augment its production capacity of iron ore to 67 million tonnes by FY25. It has also embarked on value addition projects by setting up a 1.2 MTPA pellet plant utilizing slimes in Karnataka and a
3.0 MTPA integrated steel plant in Chhattisgarh. NMDC-CMDC Limited (NCL), a JV company of NMDC Limited & CMDC Limited, will also start production from Dep-13 through MDO in the near future. Dep-4 has been also allocated to NMDC in Sep19, which will add further value to NMDC production & profit numbers. NMDC has also developed an intermediate stockpile at Kumarmaranga near Jagdlapur to ensure an uninterrupted supply of ore to the customers. To augment evacuation capacity, NMDC is supporting on Doubling of K-K line (Kirandul- Kotvatsala), Rowghat-Jagdalpur line, Slurry Pipeline, etc
To diversify further its business, NMDC is planning to start one of the Coal Mine, namely Tokisud North, Jharkhand in FY23. NMDC will also start actions to operationalize the other allocated Coal Block, Rohne, in the next 2-3 years. NMDC also participated in the auction of the Gold mine & declared as preferred bidder for Chigugunta-Bisanatham Gold Block in A.P. NMDC will take action to start the gold mine after LOI will be issued by the state government.
NMDC has recently prepared its Internationalisation Strategy to venture into various identified minerals & geographies & will continue to look for opportunistic assets based on the recommendation & strategy in the formulated report.
NMDC is committed to focusing on maintaining cost competitiveness in the global and domestic markets in a scenario where prices are expected to remain subdued. Further, NMDC is taking various initiatives towards automation & digitization of its operation to further improve its cost competitiveness.
Along with robust strategic planning to support its growth agenda, NMDC continues to enhance organizational capabilities and other enablers to achieve its short-term and long-term objectives.
6. Risks and Concerns
NMDC is exposed to sharp fluctuations in demand for its products and volatility in prices. Falling prices of iron ore, specially in international market will support the import by the steel players & exert pressure on domestic supply & prices.
Introduction of Auction rule has increased risks for NMDC as its major customers have acquired captive mines in mineral-rich states, mainly JSW & AM-NS. Both JSW & AM-NS has already started production from newly acquired mines & planned to increase it further in the near future. New tranches of auction is likely to add further capacity of iron ore to steel players as well as other merchant players in near futyre. This is likely to adversely impact the market for NMDC over the medium to long term.
Kumarswamy mine is due for extension of lease in Oct22, which will again impact the EBITDA of the company.
One of the major risks that NMDC is facing is the disturbances due to Maoist activities in Bailadila region. The Company is in contact with the Government agencies at all levels for support and protection of its employees and installations.
Although NMDC is entering in to Coal Mining, the opening of the Coal sector for Commercial mining will increase the competition for NMDC in the short to medium term.
Timely enhancement of evacuation capacity in line with production plans also remains a potential risk. This could impact production and inventory levels for NMDC.
7. Internal control systems and their adequacy
Necessary disclosure in respect of Internal Control Systems and their adequacy has been made in Annexure-C to the Independent Auditors Report dated 26th May, 2022 which forms part of the Annual Report.
8. Discussion on financial performance with respect to operational performance
During the year under review, the Companys revenue from operations increased by 68.39% from Rs 15,370 crores to Rs 25,882 crores mainly on account of:
• Increase in Iron ore Sales quantity by 21.99 % from 332.52 Lakh Tons to 405.64 Lakh Tons.
• Realization was higher by 37.48% during this period from Rs 4,581/- per ton to Rs 6,298/- per ton.
Details on financial performance with respect to operational performance are given in detail in the Directors Report.
9. Material developments in Human Resources/ Industrial Relations front, including number of people employed.
The human capital of NMDC has been its key driving factor and its greatest asset. The company has made concerted efforts in keeping the workforce highly engaged and motivated.
On one hand, continuous improvement is made to improve the quality of life at the townships with investments in parks, community halls, up- gradation/construction of new quarters, clubs, gymnasium, facilities for different sports such as tennis, badminton, table-tennis, cricket, etc. NMDC has also taken revisions in various welfare measures & advance from time to time. It also focuses on various types of insurances beneficial to the employees. To give a further support to retired employees, NMDC has launched medical insurance facility for wider coverage of hospitals.
During Covid time, NMDC has taken various initiative to give the health & safety of the employees utmost priority. Apart from supporting the employees in various sanitaisation & health measures, Ex-Gratia of Rs 15 Lakhs for deceased employees family has been also started, which is over and above the existing facility of payment of last Basic + DA every month for family of deceased employees. Various additional facilities for families of deceased employees have also been extendded
Training and skill up-gradation forms an important area where assessment is first made to understand employee needs and concerns and then, appropriate training programmes are organized throughout the year. Even during Covid time,
NMDC continued its training programmes through Web-based learning initiatives. To enhance the training further, NMDC has initiated the process of purchasing 100 comprehensive world-class E-Learning Licenses through M/s Udemy. NMDC has further associated with reputed institutes like IIM, IIT and ISB for imparting training.
NMDC has also started happiness building initiative by imparting specific training in line with IKIGAI, on happy worlplace. As a result of the all-round measures being taken by the company, attrition from NMDC has been marginal, despite remote locations of the NMDC mines.
It is worth highlighting that industrial relations have been cordial all along during the year.
Any difference is sorted out through bipartite discussions at appropriate fora. The cooperation and support of workmen represented by All India NMDC Workers Federation (AINMDCWF) in this regard are praiseworthy.
Keeping in view the various diversification projects viz. Steel Plant and Pellet Plant, & expansion of existing projects, the company has taken initiative to train /retrain its existing manpower and also to go for fresh induction.
Further, about 67 executives have been recruited in Finance in FY22021-22. All were provided on- the-job and off-the-job training in order to prepare them for taking up the challenges of working in NMDCs production projects, upcoming Steel Plant as well as any new venture that Company may like to take up. The further recruitment process is in progress for upcoming projects.
During the last five years, the number of people on rolls as on 31st March is as follows:
10. Details of significant changes in Key Financial Ratios:
Details of significant changes (i.e. changes in 25% or more as compared to the immediately previous financial year in key financial ratios:
|i) Debtors Turnover i) Ratio||10.16 (P.Y. 7.04) Increase in revenue from operation by 68% (Current year Turnover is Rs 25,882 crore from Rs 15,370 crore against previous year)|
|ii) Inventory Turnover||There is no significant change in the ratio|
|Interest Coverage iii) Ratio||127 (P.Year 232) EBITDA increase 45% (Current year EBITDA is Rs 13,306 crore against previous year Rs 9146 crore)|
|iv) Current Ratio||There is no significant change in the ratio|
|v) Debt Equity Ratio||0.10 (P.Year, 0.07) New term loan Trust & Retention Accounts of Rs 1,144.42 crore taken of @ 7.10% P.A|
|vi) Operating Profit vi) Margin (%)||There is no significant change in the ratio|
|Net Profit Margin vii) (%)||There is no significant change in the ratio|
|viii) Return on Net viii) Worth (%)||Current Year 27 % (P.Y 21.22%) Increase in PAT BY 50.30%|
|Or Sector Specific equivalent ratios as applicable||NIL|
11. Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof (For Standalone Basis)
|2021-2022||2020-2021||(% of Change)|
|Net Worth ( In crore)||34,844||29,756||(+) 17.09 %|
|PAT ( in crore)||9,398||6,253||(+) 50.30 %|
|Return on Net Worth||26.97(%)||21.01(%)|
Interim Dividend paid during the current year Rs 14.74 per share, total consideration of Rs 4,319.72 crore.
NMDC is publishing Sustainability Report as per the Global Reporting Initiative (GRI) Standards, capturing initiatives taken by NMDC over the years in Economic, Environmental and Social aspects. As the world is now traversing more uncertainty than ever, NMDC is focusing on building sustainable and resilient businesses to survive in the long run and to make a meaningful contribution to the battle against climate change through an increasing investing environment, social and governance (ESC) initiatives. All Mines of NMDC has been Awarded 5 Star Rating by the Ministry of Mines.
• The environmental monitoring studies are conducted through recognized laboratories of MoEFCC/ CPCB, covering all environmental parameters. Based on the results of monitoring studies, it is concluded that all environmental parameters are well within the limits during FY 21-22. A total of six Continuous Ambient Air Quality Monitoring Stations (CAAQMS) have been installed at Bacheli project (2 nos), Kirandul project
(2 nos) and Donimalai Project (2 nos) for recording of Ambient air quality parameters such as PM10, PM2.5, SO2, NOx and CO in real time. Procurement of 2 no.s CAAQMS are in progress for installation in Kumaraswamy Iron Ore Mines. •
• Every year Carbon Footprint studies are being conducted for disclosure of Greenhouse Gas Emissions under Carbon Disclosure Project (CDP). Water Audit is conducted at regular intervals at all projects of NMDC and recommendations of audit are being implemented to conserve water and to improve the efficiency of motors / pumps, arrest leakages, etc. Apart from this regular maintenance of water appurtenances is being done.
• Sustainable Mining Initiative audit is being done at all Iron Ore Mining projects of NMDC and recommendations are being implemented. NMDC received 5-star ratings for all its operating iron ore mines viz. Kumaraswami, Bacheli Deposit-5, Deposit 14 NMZ and Deposit No 10.
• The R&R works suggested by M/s Indian Council of Forest Research and Education (ICFRE, Dehradun) in the Environmental Management and Reclamation & Rehabilitation Plan for Kirandul Complex, Chhattisgarh and in Donimalai Complex, Karnataka are under implementation stage. The R&R plan for Bacheli complex is under final stage of submission and the reclamation measures suggested by ICFRE will be implemented.
• R&D works in the field of air, water, solid waste etc. are being undertaken by engaging institutes of repute such as ISM Dhanbad, NIT - Raipur and VNIT - Nagpur.
• The environmental pollution control works are undertaken such as de-silting of check dams / check bunds, tailing dams, construction of buttress walls at toe of waste dumps and geo-coir matting for stabilization of waste rock dumps.
• About 96 no.s wells are being monitored at NMDC projects to monitor underground water quality and water levels for all 4-seasons in a year. Studies are revealed that there has been an increasing trend in the ground water level due to hydraulic loading by the existing check dams and check bunds. Limited usage of ground water and continuous recharge helped in the process. •
• NMDC has set-up Sewage Treatment Plant (STP) with advanced treatment technology (Sequential Batch Reactor) at Bacheli (2 MLD) and at Donimalai (3 MLD) for treatment of domestic waste water. STP works are in progress at Kirandul (3 MLD) township. The treated water will be reused for green belt development.
• A total of 22,000 saplings planted in the FY 2021-22 in and around NMDC projects. Since inception of Mining activities in Bailadila and Karnataka, more than 25.42 Lakh trees have been planted in and around leases of NMDC Limited. NMDC is actively contributing funds to Government of Chhattisgarh flagship programme "Hariyar Chhattisgarh" for undertaking block plantation in the state of C.G by CGRVVN Limited.
12.2 Health & Safety
Health & Safety continue to be our priority with employees & contractual workmen at our projects adhering to the SOPs & safety norms. NMDC appreciate that safety is a journey & is committed to continually improve its performance and set high standards.
In each mining project of NMDC sufficient number of Workmen Inspectors are nominated/appointed for Mining operations, Mechanical and Electrical installations as per statutory requirements for carrying safety inspections.
Mine Level Tripartite Safety Committee Meetings have been conducted in each of the operating mines. This meeting is conducted once in a year at project level with senior officials, Union Representatives and DGMS Officials in which Safety Performance and its appraisal are made and the recommendations are implemented.
Corporate Level Tripartite Safety Committee Meetings are being held regularly once in a year at Head Office and the recommendations are implemented.
Safety Committees have been constituted in every operating mine and pit safety meetings are held every month discussing the safety matters and corrective actions related to work atmosphere.
In order to ensure that safety systems are up to date & also comply with the latest safety regulations, a cross-project internal safety audit has been started in NMDC. Safety Management system has been implemented in all our mines. Risk Assessment studies are being conducted regularly.
NMDC provides extensive safety training programmes to inculcate safety habits & mindset at work to its employees. Behavioral based safety trainings are also given to the employees.
Severity Rate for the year 2021-22 is 2.16
(Severity Rate = Mandays lost per 100000 Mandays worked).
Occupational Health Services have been provided with adequate manpower and infrastructure and are functioning in full-fledged manner at all the projects, headed by Qualified Doctors trained in OHS at Central Labour Institute, Mumbai.
Periodical Medical Examination under statute is carried out regularly in all the projects.
NMDC strives to ensure that workers are not exposed to occupational hazards that negatively affect their health. NMDC also has well equipped hospitals with capable medical teams available 24/7 to support the health & well being of the workers & the surrounding community.
12.3 Corporate Social Responsibility
• CSR is raison detre of NMDC and not just a part of business strategy. NMDCs CSR programmes are carried out in areas which are remote, backward and face serious law and order problems due to left-wing extremism. The area is among the most backward regions of India and inhabited predominantly by Scheduled Tribes and Scheduled caste population who are poor, underprivileged, deprived, suffer malnutrition and devoid of support for their socio-economic needs. It is only because of its strong focus on social responsibility programmes aiming at enhancing the quality of life of the local communities that NMDC has been successfully mining in these areas.
• NMDC is the model PSE in the field of CSR and its model of stakeholder consultation mechanism for implementation of its CSR has been recommended by Department of Public Enterprises, Government of India for emulation by all other CPSEs.
• The Company is investing substantially in promoting education, development of physical infrastructure, providing healthcare services & clean drinking water along with imparting technical skill sets aimed at enhancing employability & income generation etc. among other initiatives primarily in surrounding areas of its operations.
• Apart from the above, NMDC has been at the forefront of CPSEs contributing to the fight against COVID-19 pandemic by assisting Govt. Authorities in the States, wherein it operates or has Units/Establishments.
Gold/NCD/NBFC/Insurance and NPS
Gold/NCD/NBFC/Insurance and NPS