Mining major National Mineral Development Corporation (NMDC) registered a 22 per cent growth on the back of iron ore prices touching a record five-year high. The PSU increased its Profit After Tax in the 2018-19 to Rs 4,642 crore, compared to Rs 3,806 crore during the previous fiscal.
"The increase in our PAT is a record this time," said N. Baijendra Kumar, Chairman and Managing Director of NMDC, during a presentation on the fourth quarter results of the mining behemoth. The PSU had improved on capacities across its three iron ore mines and increased its turnover by 5 per cent from the year-ago period to Rs 12,153 crore.
The three iron ore mines of NMDC—Bailadila at Bacheli, Kirandul in Chhattisgarh and Donimalai in Karnataka—have all registered a slight decline in output as iron ore prices curtailed some of the industrial demand, Kumar said.
"NMDC has produced and sold 32.36 million tonnes of iron ore during 2018-19 against the production of 35.58 million tonnes and sales of 36.08 million tonnes during the previous year," the company said in a statement to the BSE on Tuesday.
The company claimed that its operational cost of $11.5 per tonne of iron ore is among the best in the world, when compared to global mining majors like Vale, Rio Tinto, BHP Billiton and FMG.
Production of iron ore declined by 9 per cent during the year, while exports showed a decline of about 55 per cent in the 2018-19 fiscal. A part of the decline in exports is that of low-grade iron ore with 58 to 60 per cent iron content. China, a major consumer of the lower grade iron ore, in their mills had shifted its demand for high-grade ores, owing to environmental constraints in the country.
Basic domestic prices of iron ore also remained high this year. Prices of lumps, fines and billets rose by 35 per cent during the year.
Meanwhile, with iron ore supplies remaining constrained from Brazil and Australia, prices have skyrocketed. Iron ore future prices at the Dalian Commodity Exchange on Wednesday were trading close to 750 renminbi per tonne ($108.5), up 4.8 per cent from the previous day, and at an all-time high in the last five years.
NMDC remains a major supplier to domestic steel producers. A hike in iron ore prices has prompted steel and iron producers to hike prices of both flat and long steel from June this year. Manufacturers have claimed that the hike in steel prices would partly compensate them for the spike in iron ore prices (by 35 per cent) experienced by them this year.
