NMDC to spend $500m this year for coal, iron ore assets abroad

The country's top iron ore producer is targeting four assets, including two coal and two iron ore, in Russia, the US, Australia and Africa.

"A navratna company can spend one-third of its networth on overseas acquisitions which comes to USD 1.2 billion (about Rs 5,400 crore) for us. This fiscal our target is to spend up to USD 500 million and we have already shortlisted four assets abroad," NMDC Chairman Rana Som told PTI.

Som said due diligence is on for two coal assets and two iron ore assets and the company was hopeful of finalising these by June this year.

The mining giant is eyeing acquisitions to expand its capacity and to ensure raw material security for its upcoming steel mills in Chhattisgarh and Karnataka.

NMDC has already forayed in to steel making and is setting up a 3 million tonnes steel plant in Chhattisgarh. It plans to build the Rs 15,500-crore mill by 2014 for which it requires raw material security.

Besides, it has a joint venture with Russia's Severstal to set up an initial two million tonnes per annum (MTPA) steel plant in Karnataka at a likely investment of Rs 25,000 crore, which can further be expanded to 5 MTPA.

At present, the Navratna firm has annual iron ore production capacity of about 30 MT from 3 fully mechanised mines in Chhattisgarh and Karnataka.