NMDC Iron Ore Production Falls by 6.9% in FY16

NMDC misses iron ore production guidance by 6.7 MnT and sales guidance by 9.1 MnT.

India’s single largest iron ore producer-National Mineral Development Corporation (NMDC) produced 28.3 MnT iron ore against 30.44 MnT in previous fiscal. Thus, miner’s overall iron ore production has fallen by 6.9%.

The miner produced 16.6 MnT iron ore from its Chhattisgarh mines (down by 21% Y-o-Y) and 11.7 MnT iron ore from its Karnataka mines (up by 24% Y-o-Y) in FY16.

Comparing the sales figures, NMDC iron ore sales have declined by 5% and was recorded at 28.9 MnT in FY16 against 30.53 MnT in FY15.

Earlier in FY16, NMDC had laid down iron ore production guidance of 35 MnT and sales guidance of 38 MnT for FY16.

However it has missed its production guidance by 6.7 MnT and sales guidance by 9.1 MnT in FY16. Prime reasons behind decline in production and sales are-

1. Maoist activities at NMDC’s Bailadila mines in Chhattisgarh
2. Technical fault in its slurry pipeline to Essar Steel (one of the prominent buyers of NMDC (C.G.)
3. Trade union strike in Sept’15 that impacted the company’s production nearly by 75,000 MT in Chhattisgarh and Karnataka
4. Iron ore sales declined as the considerable decline was seen in NMDC export figures which dropped from 2.4 MnT in FY15 to 1.1 MnT in FY16. Reason behind decline in export was due to delay in renewal of company’s Long-term Trade agreements (LTAs) with South Korea and Japan