NMDC to infuse ~Rs900 crore for ramping up production at Kumaraswamy mines; stock climbs ~4%

21 Nov 2022 , 10:45 AM

NMDC Limited plans to invest upto Rs900 crore over the next two to three years to increase iron ore production from 7 MTPA to 10 MTPA at its Kumaraswamy mines in Karnataka.

In a meeting held between November 9-11, an Expert Appraisal Committee under the Minister of Environment and Forests gave its green signal for Environmental Clearance, allowing NMDC to increase production and the EC is valid until 2042, according to company sources.

The Karnataka government renewed the lease for the Kumaraswamy mine for another 20 years in June 2022, bringing an end to a period of uncertainty.

In August, the Supreme Court increased the ceiling limit for iron ore mining in Karnataka from 28 MMT to 35 MMT for the Ballari district, and from 7 MMT to 15 MMT for the Chitradurga and Tumkur districts.

NMDC has an EC for 7 MTPA and produces 7 million tonnes. On November 10, the Indian Bureau of Mines (IBM) recommended that the company increase its capacity from 7 to 10 MTPA. At the site, there will be a crushing, screening, and loading plant. According to sources, the CAPEX for all of these projects will be Rs898 crore spread over two to three years.

Because the EAC has already recommended the project, it is expected that the Ministry of Environment, Forests, and Climate Change will issue the EC next month, according to sources.

In FY23, NMDC plans to produce 46 MTPA of iron ore. This volume is 10% higher than what the PSE produced in FY22 and will lend support against any potential pricing pressure, the miner previously stated.

At around 10.47 AM, NMDC was trading at Rs115.05 up by 3.65% from its previous closing of Rs111 on the BSE. The scrip opened at Rs113.05 and touched intraday high and low of Rs115.50 and Rs112.10 respectively.

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