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NMDC plans to increase iron ore mining capacity to ~70-75 MT by end of CY24!

ICICIdirect Research 22 Mar 2023 DISCLAIMER

What's Buzzing 

NMDC has chalked out plans to increase its iron ore mining capacity notably in the medium term. Over the next couple of years, NMDC plans to enhance its iron ore mining capacity by ~35-45%. 


NMDC has outlined plans to achieve iron ore mining capacity of ~70-75 million tonnes (MT) by end of CY24 from 51.8 MT at the end of FY22. The improvement of evacuation capability would aid NMDC to augment its iron ore mining capacity. 

Our Perspective 

For FY22, NMDC iron ore sales volume was at ~ 40.7 MT while for 11 months FY23 (from April 2022-February 2023) NMDC’s sales volume was at 33.4 MT. In terms of state wise contribution, of the total iron ore sales volume ~71-72% was from Chhattisgarh while balance 28-29% was from Karnataka. Over the last couple of years, NMDC’s sales volume witnessed a flattish trend due to limitation on the evacuation side. However, with the expected commissioning of the railway lines coupled with addition of the slurry pipeline, there is expected to be a significant increase in NMDC's iron ore mining capacity, going forward. The doubling of the KK line between Kirandul & Jagdalpur is being executed by Indian Railways. Overall progress of this work is 75% while completion of this project will augment the evacuation capacity of Bailadila sector from 28 million tonnes per annum (MTPA) to 40 MTPA. NMDC is also setting up slurry pipeline with capacity of 15 MTPA from Bailadila to Nagarnar and further up to Vizag. Furthermore, NMDC is working with railways to ensure higher availability of rakes - 30 rakes from 15-16 rakes currently. Doubling of KK railway line and addition of slurry pipeline are expected to increase evacuation ability and, consequently, aid NMDC to achieve iron ore mining capacity of ~70-75 MTPA by the end of calendar year 2024 (CY24) from 51.8 MT at the end on FY22. Also, Indian Railways recently competed 100% electrification of broad gauge network in Chhattisgarh. As majority of iron ore sales volume of NMDC comes from Chhattisgarh, the 100% electrification of broad gauge augurs well for NMDC.

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