Indian government-run miner NMDC Limited has initiated talks with various state governments, seeking reservation of some iron ore blocks and preferential allotment to it instead of participation at auctions, to be able to meet its production target of 100 million mt by 2030, company sources said on Wednesday, June 25.
The sources said that NMDC Limited had identified iron ore reserves including Malongtoli in Odisha, Bailadila Deposits 3 and 8 in Chhattisgarh, Ramandurg in Karnataka, Gadchiroli in Maharashtra and Karampada in Jharkhand.
Iron ore blocks are auctioned by respective state governments as mandatory under the rules of the Mines and Mineral Development and Regulation Act. However, the legislative framework provides for preferential allotment of mineral blocks to government-owned companies.
NMDC Limited in talks with various state governments has pointed out that it is unable to participate and compete at the auctions as it entails paying hefty premiums for bids to be successful.
While paying high premium bids at auctions to secure an iron ore block may be economically viable for steel companies seeking to secure raw material supplies, it is unviable for merchant miners like NMDC Limited, the sources said.
To support its goal of achieving its production target of 100 million mt per year by 2030 against around 45 million mt per year currently, NMDC Limited plans capital expenditure of an estimated $8.15 billion over the next five years, of which spending of around $3.5 billion has already been approved for ongoing projects, the sources said.