'Iron ore demand, price under pressure due to Chinese factors'
State-owned NMDC Limited today said iron ore prices and demand may come under pressure due to factors such as subdued production in China and ramping up production by some of the large mines across the globe.
N Baijendra Kumar, Chairman-cum-Managing Director of NMDC also said though the global demand may come under pressure, Indian scenario would be different as domestic demand may go up due to expected growth in steel demand.
"Going ahead, however, iron ore demand and prices are likely to come under pressure with expectation of Chinese steel production stagnating, sea-borne iron ore supplies increasing with large-scale mines ramping up production and competition from scrap as feedstock," Kumar said in the Annual General Meeting here.
"Fortunately for us, India's steel demand is poised for an impressive growth in the years to come, which would certainly translate into higher consumption of iron ore domestically," he said.
Later talking to reporters, he said NMDC is expected to spend Rs 3,000 towards capex including the expenditure on Nagarnar steel plant in Chhattisgarh, during the current fiscal.
Replying to a query, he said the miner is aiming to achieve a sales target of 37 million tonnes during the current year against 35.6 million tonnes last year.
On the cost escalation of the steel plant due to delays, Director (Finance) Davinder Singh Ahluwalia said the company is currently working on the cost overruns and has not come to a certain figure.
NMDC is setting up a new Greenfield 3-million tonne per annum steel plant in Nargarnar. The PSU has so far spent Rs 12,560 crore so far on the project.
Ahluwalia said, the US Dollar was about Rs 52 when the project estimate was conceived in 2008 or 2009 and currently it was Rs 62 and the difference may have impacted the project cost to that extent.
"We have appointed transaction advisor, legal advisor and valuation advisor for the divestment of stake in the steel plant. Once we receive their reports, the Board will discuss it and send the proposal to the Government.
"An interministerial group will decide on the quantity of stake that should be divested," Kumar said.
The Department of Investment and Public Asset Management (DIPAM) has prepared strategic divestment plan as per the decision of the Cabinet Committee on Economic Affairs (CCEA) for strategic divestment of various public sector enterprises (PSEs), including Nagarnar Steel plant.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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