NMDC, India Result by Indian Steel Minister

Steel Minister Reviews the Performance of NMDC

The Union Steel Minister Shri Beni Prasad Verma has reviewed the performance of NMDC Ltd., a Navratna PSU under Ministry of Steel for the first quarter (April-June), 2011-12 here today. The CMD of NMDC Shri Rana Som briefed the Minister about the performance of the company during the first quarter of 2011-12 and highlighted its achievements against the MoU targets for the year quarter. The Minister expressed satisfaction over the performance of the company in the first quarter of the financial year 2011-12. He was informed that the Company has embarked upon expansion and diversification plans in India and abroad. However, the Minister stressed that the upcoming projects of NMDC in India and abroad specially its 3 MTPA Integrated Steel Plant at Nagarnar, Chhattisgarh, its 1.2 MTPA Pellet Plant in Donimalali, development of Deposit – 11B Mine in Bailadila Sector, Chhattisgarh and Kumaraswamy Mine in Karnataka needs to be completed as per schedule. The Minister also appreciated the R&D efforts of the Company for converting the low grade iron ores such as BHJ and BHQ into value added products. The Company has been consistently showing excellent results. During the year 2010-11, the production of iron ore was 25.16 million tonnes as compared to 23.80 million tonnes during previous year showing a growth of about 6%. Sales Turnover of the company during 2010-11 was Rs. 11367.42 crores against Rs. 6229.54 crores during the previous year, registering an increase of about 82%. The company earned profit before tax of Rs. 9727.17 crores during 2010-11 as compared to Rs. 5207.32 crores during previous year and profit after tax during 2010-11 was Rs. 6499.22 crores as compared to Rs. 3447.26 crores during previous year. The performance has further improved during the first quarter of 2011-12. During the period April – June, 2011, the production of iron ore was 6.07 million tonnes as compared to 5.76 million tonnes in the corresponding period of previous year showing a growth of 5%. The turnover during first quarter of 2011-12 was Rs. 2782.61 crores in comparison to Rs. 2517.99 crores during the first quarter of 2010-11. The profit before tax during Q1 of 2011-12 was Rs. 2662.69 crores in comparison to Rs. 2249.22 crores of the first quarter of 2010-11. ***

Indian Miners in Karnataka: Sesa Goa, JSW Steel, etc

Mining ban extended in Karnataka

Supreme Court (SC) extends mining ban to Tumkur and Chitradurga districts:

Central Empowered Committee (CEC) had found that iron ore miners
resorted to illegal mining activity in Chitradurga and Tumkur districts of
Karnataka resulting in environmental damage and loss of forest cover. As per
CEC, the level of illegal mining and the consequential environmental
degradation in these two districts were similar to that in Bellary district. Thus,
based on the CEC’s suggestions, the SC has extended the ban to Tumkur and
Chitradurga districts. These two district account for approximately 20% of
Karnataka’s iron ore production. Earlier (on July 29, 2011), the SC had
ordered a blanket ban on mining in Bellary district of Karnataka (accounts for
80% of Karnataka’s iron ore production).


Severe steel production cuts underway in the region

With extension of mining ban in Chitradurga and Tumkur districts, iron ore
 production will decline drastically in the state which will be followed up
 by severe cuts in steel production in the region. Some of the plants in the
 region have been already shut down while several plants are running at
a lower utilisation levels on the back of shortage of iron ore to feed their furnaces.
 Steel industry in the region requires approx. 2.9mn tonnes of iron ore per month.
Currently iron ore from Karnataka is used to feed plants of companies that
include JSW Steel, Kalyani Steels, Mukand Steels, Kirloskar Ferrous, MSPL,
 BMM Ispat etc.

Further, several sponge iron manufacturers in Tamil Nadu and Goa also
source iron ore from Karnataka. On the supply front, NMDC’s Bellary mine is
the only major mine operating in the region; however, it is still to achieve its
targeted run-rate of 1mn tonne per month from its Bellary mines.
Auctions of piled-up inventory may provide some relief: The current iron ore
inventory at Karnataka’s mines is estimated at 25mn tonnes, which includes
~11mn tonnes of high-grade iron ore. As per JSW Steel, the SC is expected
to provide guidelines on auction of this iron ore inventory on September 02,
2011. SC has indicated that it will ensure that the required amount of ore is
released so that the steel industry does not suffer. Further, SC will look into
rehabilitation and forestation package and henceforth, permit regulated
mining in the region. This may take several months.

Sesa Goa’s Chitradurga mine to be shut:  Sesa Goa operates an iron ore mine
in Chitradurga district which would be shut down until further update by SC.
Our earlier estimate of production and sales volumes from Chitradurga mine
for FY2012 was 5mn tonnes (21.8% of Sesa’s total production volumes for
FY2012). With mining ban in the region,  now prune  production and
sales volume estimates for FY2012 and FY2013. It is expected no
production from Chitradurga mines. Except a  lower our target price to `253
(`335), valuing the stock at 3.0x FY2013 EV/EBITDA

The Question now hang on the fire, to the Extent to Which and Whether the companies
to Punishment. Shri Rao, JSW Steel, in his Press Conference had, Disassociated from t
the Mafia, But the Lok Ayuktta Report had mentioned there name. Market is expecting
Some Fine to be imposed on some of the Biggies  and  whether is takes the proportion of
the ' 2G ' Scam or worse..?