NMDC steel plant commissioning, demerger delayed to FY22-end

Steel Insights Bureau

The commissioning of NMDC’s 3 million tons per annum steel plant is further delayed due to non-arrival of foreign expats amid Covid-19.

The company has spent Rs 18,600 crore till now and the plant is now expected to be commissioned by FY22-end, Chairman cum Managing Director, Sumit Deb told analysts during a conference call following FY21 results.

NMDC will seek Board approval on July 31 for draft demerger plan of steel plant. Thereafter, various statutory permissions would be required; the demerger is likely to be completed by Q4 of FY22.

Of the total capex of Rs 21,300, another Rs 3,000 crores is pending, he said.

“Total capex for this year is around Rs 3,700 crores and for the steel plant would be around Rs 1,500 crores and we are looking at commissioning the plant in Q3,” Deb said.

“We expect the board to sort of give its approval to the draft demerger scheme by July 31. Once that happens then we take it to SEBI and Competition Commission of India and come back and then modify if they have something to say,” he said.

This could take anything between 100 and 160 days depending on how much time Securities and Exchange Board of India and other bodies take.

“So, if I start from August 1, it could be anything within 100 days to 160 days from August,” Deb said.

Steel project

The commissioning of the Nagarnar steel plant would be integrated, it starts with the coke ovens and then heating out the coke ovens and then it ends with the rollout of the coil.

NMDC is putting up a pellet plant of 2 million tons at Nagarnar. There is also a slurry pipeline in phase I up to Nagarnar from Bacheli and subsequently NMDC would be building in the second phase, another pipeline up to Visakhapatnam and a pellet plant there of 6 million tons capacity.

As with all other customers who offtake iron ore, NMDC has a long-term agreement for the steel plant and iron ore would be supplied at arm’s length pricing.

As with all other customers who offtake iron ore, NMDC has a long-term agreement for the steel plant and iron ore would be supplied at arm’s length pricing.

Coking coal sourcing

NMDC has placed orders for around 75,000 tons of coking coal for the coming requirements.

Other raw materials like limestone and dolomite have all been tied up.

“So we are pretty confident of starting the commissioning process,” Deb said.

Pellet plant

NMDC’s pellet plant is still making losses despite a significantly high level of pellet prices.

NMDC is currently addressing issues related to the plant which also has a beneficiation plant.

The beneficiation plant has some technical issues with regard to the pressure filter which the company has taken care of now and the pressure filters which have been installed by a company are being tested.

One module is ready and the next module is also being ordered.

“The plant has started production and hopefully we believe that the plant will gradually be ramped up to its rated capacity,” Deb said.