Covid-19 delays NMDC's Chhattisgarh steel plant
Likely to be operational in July 2021
Hyderabad: The Rs 21,000-cr steel plant of the state-owned miner NMDC Ltd has been delayed due to Covid-19. The 3-million tonne capacity steel plant is coming up in Chhattisgarh and was scheduled to be commissioned this year. However, it's now expected by July 2021, according to a top official.
Sumit Deb, CMD of NMDC, said: "Experts from foreign countries, engaged in the project work, could not undertake a visit for an inspection and clearance in view of Covid-19 travel restrictions."
The city- headquartered NMDC has invested Rs16,000 crore in the plant and the total cost would be Rs 21,000 crore once completed.
Senior officials of the PSU had earlier indicated that the plant would be operational this year. Replying to shareholders' queries at the virtual annual general meeting, Deb said NMDC
Nagarnar steel Plants targeted date was this year, but due to Covid-19 impact foreign experts could not visit the plant. Now, the revised target is it will start by July 2021.
Deb further stated that "the company planned to take some debt also before commissioning the activity. The plant is on the verge of completion. We have some balance work which will be taken up.".
According to him, the steel plant is expected to generate annual revenues of Rs 14,000-Rs 15,000 crore (at the optimum production levels) with EBITDA (Earnings before tax depreciation and amortisation) margins of 15-20 per cent.
Replying to a question on the demerger of the steel plant, Deb said the Board of Directors has already given the clearance with mirror shareholding. Deb said NMDC normally invests about Rs 2,000 crore towards capital expenditure. However, this fiscal it would slightly reduce to Rs 1,860 crore. Earlier in his speech, he said NMDC has been in discussions with both the Karnataka government and the Centre on Donimalai Mine lease extension to resolve certain unviable terms in the lease agreement.
On September 15, the state Cabinet cleared the company's application for starting mining operations at Donimalai.
However, the actual resumption of mining operations in Donimalai mines is expected to be started in the month of October, 2020 which will add production of 5-6 lakh tonnes per month, the CMD added.