State-run mining company NMDC aims to double its current production capacity to more than 100 million tonnes over the next 10 years, according to Amitava Mukherjee, the company’s chairman and managing director.
In an interview with NDTV Profit, Mukherjee said the company plans to spend up to Rs 75,000 crore on capital expenditure to achieve this goal.
“We are planning to spend around Rs 70,000-75,000 crore to take our production capacity to around 100 million tonnes by the end of 2010, which will also require significant investment in terms of marketing and shipping infrastructure. It will be,” he said.
Mukherjee added that the company has significant cash balances and planned capital expenditures will be financed from internal accruals.
“Our cash balance is around Rs 13,000-14,000 crore and this will increase as production increases. We also expect internal receivables to increase. Hopefully, we will no longer need to borrow. I hope so,” he said.
The CEO predicted that the increased production capacity would increase the company’s profitability by at least two times, if not more.
Mukherjee said the country’s largest iron ore producer is on track to meet its FY25 capital expenditure forecast of Rs 2,200 crore.
“We have already achieved around Rs 700 crore in the first half of the year. I think we can easily achieve the remaining amount in the second half.” [capex]. The company has spent around Rs 1,500 crore on acquisition of strategic land in Vizag. There, the company plans to terminate a slurry pipeline, build a pellet plant and also build a large compounding yard. These are the main highlights of capital investment. I think the capex will eventually reach Rs 400 billion by the end of this year,” Mukherjee added.
The land acquisition is related to the company’s project to build a 400-kilometre slurry pipeline to transport iron ore from Bailadila mine in Chhattisgarh to Vizag in Andhra Pradesh.
Mukherjee is confident that NMDC Ltd. will cross the 50 million tonne sales mark in FY25.
