Indian ore firm to spend $3.2 billion on expansion

Indian ore firm to spend $3.2 billion on expansion

National Mineral Development, India’s biggest state-run iron-ore producer, said it will spend a total of 135 billion rupees, or $3.2 billion, to raise output, build steel and iron plants and invest in coal mines overseas.

The company, based in Hyderabad, will invest 35 billion rupees to raise iron-ore production 85 percent, the company’s chairman, B. Ramesh Kumar, said in an e-mailed statement April 7. A further 90 billion rupees will be spent on iron, steel and power plants, while 10 billion would be earmarked for coal-mine purchases.

Indian iron-ore miners and steelmakers are increasing output to feed rising demand for steel as the nation uses more of the metal in buildings, cars and appliances. Asia’s fourth-largest economy has grown 8 percent annually in the past three years.

National Mineral currently produces about 27 million tons of iron ore a year, a sum that would rise to 50 million by 2015, the statement said. The company also plans to set up a 2 million ton steel plant, two pellet plants and a sponge-iron plant in the central state of Chhattisgarh, and a 300 megawatt power plant in the southern state of Karnataka.

“We are in discussions with companies like Steel Authority and Rashtriya Ispat Nigam to partner us for the steel plant,” Kumar said in the statement. “We have received approval for all these projects.”

The company will invest 10 billion rupees in a so-called special purpose vehicle, which would be set up with four other state-owned companies, including NTPC, to bid for coal mines overseas, Kumar said.

NPTC is India’s largest power producer, Steel Authority is the largest state-run steelmaker, and Rashtriya Ispat Nigam is a state-run maker of wire rods, bars and billets.

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