Notification delay may pull NMDC iron ore exports below 1 mn tonnes

Thu, 3 Nov, 2011

Hyderabad : State-owned NMDC’s exports of iron ore may fall by over 61 per cent to less than 1 million tonnes this year from 2.6 million tonnes last year, a senior official of NMDC has said.

The official, who declined to be named, said the drop in exports will not impact the financials of the company, as domestic demand and prices are encouraging.

The plunge in exports is primarily due to the delay in issuance of a notification by the government permitting overseas shipment of the mineral resource even after Cabinet approval, the official said.

“Even if we get approval from the government this month or next month, we will consider exports on a pro rata basis.

If we start exports in January, we may export around 0.6 or 0.7 million tonnes this year. We may not touch the 1 million tonnes mark,” the official told PTI.

When contacted, NMDC Chairman and Managing Director Mr Rana Som said Cabinet has approved exports by the company to the extent of 2.8 million tonnes per year for three years.

He also confirmed that the export entitlement of the company in each year will be determined on a pro rata basis.

NMDC sells fine variety ore at Rs 3,380 per tonne and lumps at Rs 4,600 per tonne.

Total exports of iron ore amounted to 2.56 million tonnes during FY’11, as against 3.43 million tonnes in the previous financial year, a decrease of 25 per cent.

Meanwhile, a team of officials from Minemakers Limited, an Australia-based mining company, is meeting with NMDC officials on a proposed joint venture to develop the Wonarah phosphate deposit in Australia’s Northern Territory.

“They are in Hyderabad. We will have to study what all reports they gave us on the project. After that, we will conduct due diligence and take a decision,” Mr Som said.

NMDC had earlier entered into a non-binding agreement with Minemakers to develop the latter’s Wonarah phosphate deposit, which is Australia’s largest undeveloped rock phosphate project.

If the project is found favourable, NMDC and Minemakers will then form a JV in which the Indian miner will pick up a 50 per cent stake and have the responsibility for arranging finance for the project through debt raising.

NMDC will also repay Minemakers for costs already incurred on the development of Wonarah.

The investment made by NMDC on the study and other activities may be converted into capital when the JV is formed.

Keywords: notification delay, NMDC, iron ore exports

(sourced The Hindu Business Line)