Ladies and gentlemen, good day. Welcome to NMDC Limited Q4 and FY 2026 earnings conference call hosted by PhillipCapital. As a reminder, all participant lines will be in a listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Mr. Suman Kumar from PhillipCapital. Thank you, and over to you, sir.
Thank you, operator, and welcome everyone to the call. I first thank NMDC for giving PhillipCapital the opportunity to host today's call. We have with us from the management today Shri Amitava Mukherjee, the Chairman-cum-Managing Director, joined along with Mr. Anurag Kapil, Director of Finance, NMDC. Without further ado, I would like to hand over the conference to Amitava, sir, for his opening remarks. After this, we can open the floor for Q&A. Over to you, sir.
Well, good morning, everybody, and thank you for joining. As you know that NMDC's performance in FY 2026 has been rather encouraging. We have touched 53 million tons of production. We have crossed that. Our sales revenue has grown to INR 31,000. We are all now ready for the Maharatna status of this company because now we fulfill all the requirements of a Maharatna company. Despite slightly sluggish prices, we've been able to achieve an 11% growth in PAT, and all our financial indices and operating indices have been rather encouraging. I believe that this sets the foundation for us to achieve 100 million ton by the end of this decade. In that journey, I think this year we will be targeting 60 million tons, which we hope to achieve.
The good news is that, the more encouraging thing is that we've been able to open a coal mine in Jharkhand, which gives us a new mineral as well as a new geography. After 50 years, we have been able to open a iron ore mine that is Deposit 4 in Bailadila. That is, of course, under the NCL banner, NMDC-CMDC banner, where we have 51% stake. Very soon, we hope that this financial year, we hope to open the other iron ore mine, which is in Deposit 13, and also the Rohne coal block in Jharkhand, which is a coking coal block. There's a lot of action that is happening and obviously, we are also pursuing assets abroad. A few of them are in very advanced stages of acquisition. Obviously, we cannot disclose the details because of confidentiality agreements.
This year we hope to acquire a couple of assets abroad as well. The CapEx this year has been around INR 3,300 crores, which is an all-time high CapEx, if you leave out the land acquisition this time, we hope that this year we'll be able to substantially increase our CapEx, almost double the CapEx now, because all our expansion plans right now are on the ground. We have to award a couple of them. Rest of them are already under execution. We are well on our way to get to 100 million tons by the end of the decade. My colleague, Mr. Anurag Kapil, Director of Finance, is also here. He might like to add something to what I've said. Anurag, please.
Good morning to you all. This is a tremendous performance which NMDC has given in the previous financial year. As Shri Amitava has just mentioned, we have surpassed all the expectations and crossed the magical figure of the production, which is 50 million ton. The growth of around 20%-30% in various parameters is really a pathway, which will be making it possible to achieve 100 million ton by 2030. The more important part is, the diversification path of NMDC, which is like, as Shri Amitava just mentioned, regarding coal and other minerals. Also, the acquisitions of various minerals abroad.
Subsidiary for rare earths.
We have also opened a subsidiary.
Rare earths.
For rare earths, which will be.
Critical minerals. We have actually also opened a subsidiary which is now completely dedicated to rare earths and other critical minerals. We are taking those critical requirements of the country very seriously, and we hope to achieve breakthrough in that as well very soon. We can take questions now, if that's okay.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question is from the line of Mr. Amit Dixit from Goldman Sachs. Please go ahead.
Thanks for the opportunity. First of all, congratulations for great performance, sir, particularly on operational front, achieving above 50 million tons of production and sales. A couple of questions. The first one is, NMDC Steel, if it's possible to mention the volumes. Since now it's going to be a substantial portion of our revenue, so would appreciate if we can give the quantity sold by us in the presentation. For this quarter, if you can let us know the quantity that we sold. Also, what are the basic terms for this? Because this number appears in cost as well as revenue. Just wanted to get little bit of more clarity on this for projection purpose.
This was essentially an arrangement made for a very specific requirement of NMDC Steel, where they were facing cash flow. We stepped in and we were doing trading business with the HR coils of NMDC Steel. In Q1, there's not going to be any trading right now. That is essentially a special mechanism, as and when, if there's a cash flow issue at NMDC Steel, and we generally tend to step in and buy HR coil and then sell it in the market. However, because at that time NMDC Steel was, as you know, is under the same management, and at that time the marketing was being done by SAIL, and there was a lag in realization of material sold. At that time we had to step in. I don't think that would be triggered right now.
Because that was a very low volume business. If you see our EBITDA, it has come down from 42% to 33%, essentially because of steel business. If we take this iron ore business standalone, our EBITDA is still at 42%. Because of the steel business in the last quarters that we had to do, which was essentially trading, the EBITDA has come down. That was a one-time measure. I do not think that this quarter it definitely is not required. Maybe this financial year it will be very rarely used, if at all, if it is required. Yes, Amit.
Okay, sir. Got it, sir. The second question is essentially. Congratulations for opening Deposit 4. I think after a long time finally we see it getting.
Two years.
Yeah. Just wanted to understand the Deposit 4 capacity, when we will hit the rated mining capacity, and also Deposit 14, that's also a very welcome thing. On coal mines, Rohne and Tokisud, how do we see the production ramping up? If you can detail it out, sir. That would be great.
Deposit 4, as you know, we have already opened and we are now installing the infrastructure. We hope to have commercial mining commencing on July. That's in Q2. This year, I think the guidance would be around 1 million ton out of Deposit 4. Next year it will be 2 million ton, followed by, once the infrastructure is all ready by another one and a half, two years, then it will be ramped up to 7 million ton, which is the peak rated capacity of Deposit 4. Deposit 13, because we are still awaiting some clearances, which we hope that we'll be able to commence, start the mine somewhere around in Q2, followed by monsoon. I don't think that we will be able to do more than 0.5 million ton out of Deposit 13.
Next year we will do around 2 million ton out of Deposit 13, and then the peak rated capacity initially is 10 million ton, but we plan to ramp it up to 20 million ton-21 million ton in four to five years' time. That is the iron ore section. Regarding coal, Tokisud, as you know, is already operational. We are removing OB. By this month end or maybe in Q2, we should be able to hit the coal seam, and we should be able to now extract coal by Q2. Our guidance for Q2 would be around 0.75 million ton-1 million ton of coal this year. The peak rated, as you know, in Tokisud is 2.3 million ton. Rohne, of course, will take some time to open up because lots of approvals are still pending. We plan to open it around late Q3.
This year we don't envisage any production out of Rohne because the overburden removal, et cetera, will have to be carried out once the mine is open. Rohne would open around Q3, end of Q3.
Great, sir. Thanks a lot for these details, and all the best.
Thank you. Next question is from the line of Sumangal Nevatia from Kotak Securities. Please go ahead.
Yeah, good morning. Thanks for the chance. First on the guidance of 60 million ton. Can you guide mine-wise where are we expecting the incremental 10 odd million tons?
Yeah.
[5.7.] Yeah.
Yeah. Deposit 14 will get one extra, and Deposit NMZ will get one extra. That's 2 million tons extra as compared to last year. Kumaraswamy, we will be getting around 1.3 million tons extra because it has a peak limit capacity of 10 million tons, and last year we had this MPAP imposed for 8.6 million tons, which I hope that we will be able to get around. That's around 3 million tons extra as compared to mine wise. If we target the last year that we could not achieve in Deposit 5, instead of 12 million tons, we had done around 10 million tons. That will be 2 million tons extra from Deposit 5. All this totals up to around 5.3 million tons. If we add to 53 million tons that we did, so we will end up with NMDC as around 58.5 million tons.
If we add 1 million tons from Deposit 4 and another 0.5 million tons from Deposit 13. As a whole, NMDC, including NSL, would touch 60 million tons. This is the guidance.
Understood. Sir, when Deposit 4 ramps up, will that be replacing the supply which we are currently doing to the steel plant?
No, these are all fungible. Nothing is linked to any mine. No plant is linked to any mine. These supplies are fungible, depends on the production, depends on the quality, depends on the requirement of the steel, and most importantly, depends on the logistics at that point of time.
Understood.
For example, today we are supplying to NSL from Kirandul as well as from Bacheli. We are supplying material from Deposit 14 and Deposit 11, Deposit 5 also, Deposit 10 also. The supplies are fungible.
Understood. Sir, can you explain the economics of the coal mine? What would be, depending on the grade, the price, all the duties, levies, and overall profitability?
I think we would be able to be significant because initially, most of it would be in auction, that will fetch a substantially higher prices than the CIL FSA will do fetch. If 1 million ton is there, I think approximately that should account for around INR 500 crore-INR 600 crore, I think. If you take an average EBITDA of 30%-40%, that would be the first year. These are all very approximate figures. We'll have to see how we go along with it, what prices are realized on auction and local sales. These are very preliminary and approximate figures.
Okay. Sir, what will be the grade and, I mean, in terms of royalty and all the government duties, what are our liabilities?
G10.
Okay.
If I remember correctly, it is G10, the grade.
Understood. Sir, with respect to RINL, how confident we are on the recovery of all the receivables, and we're paying around INR 1,500 crore for the land lease, INR 1,800 odd acres. Can you explain what is the use of such a big land parcel?
Yes. The board has already sanctioned investment of around INR 3,000 crore for creation of a blending yard. In India, no company has ever manufactured or supplied branded iron ore. Unlike in the international market, you have Rio Tinto selling RTX and RTF and BHP selling Jimblebar Fines and Newman High and Vale selling IOCJ. These are all branded iron ore. India has never tasted that. NMDC will be the first company in three years' time will be selling branded iron ore. Board has already sanctioned an investment proposal for INR 3,000 crore approximately for making a blending yard at Vizag, where we will be making this blended iron ore of a consistent quality which India has never seen. We expect that to be a game changer, in fact, in the iron ore market in India. That's a real big thing.
Apart from that, of course, we'll have a pellet plant there in due course of time once the mode of the slurry pipeline is decided. We have also kept a land parcel for other purposes, like making a lithium refinery or something, as and when we get some mines abroad or any other critical mineral processing zone that might be required because we are aggressively looking for other minerals as well, and we'll require processing area. That is a port-based area. It's a wonderful land parcel of around 1,100 acres. I think all these, NMDC's future expansion plan is dependent completely on the Vizag land parcel. We have big plans. One, board has already sanctioned INR 3,000 crore, which I think will be completed in around two years' time, two to two and a half years' time. The rest, of course, will be as we have long-term plans.
Understood. Just one last question. Is it possible to share over what time do we expect to recover all the receivables and the dues from NSL and RINL?
NSL now it has become profitable, as you are aware. NSL has become profitable. This year we expect much greater profits because most of the operational aspects have been solved except for one or two. This year we expect to make greater profit. NSL, we see light at the end of the tunnel. I guess it should take about a year and a half, max two, to liquidate all the entire amount of outstanding. If you see NSL pre-demerger expenses was around INR 2,500. It has already been reduced to around INR 1,800. INR 700 has already been liquidated despite such difficult circumstances. We are doing about INR 100 crore every month, that should take around 16- 18 months to get liquidated. The rest would also get liquidated, I think, in a year or a year and a half. That's not a problem.
RINL, of course, we'll have to have another look at what their plans are. We are in touch with RINL. Hopefully, once it turns around, as you know, it's a 100% government-owned company, so we don't see any risk. Of course, there's a time element to that, but we don't see any risk in that.
Understood. Thank you, sir, and all the best.
Thank you. Next question is from the line of Vikash Singh from ICICI Securities. Please go ahead.
Good morning, sir, and thank you for the opportunity. Sir, just wanted to understand any threshold which we have in terms of credit to RINL or on a good faith it will continue?
No, it will continue as of now as it is done. You see, RINL, we have an arrangement of bill discounting with RINL. Obviously we are getting that money with 45 days lag. Over and above what they are consuming, they are paying around 10% extra for that. The liquidation process is on, but it is a little slow. You see from the business perspective, they consume seven to eight million tons of our product and are located in a very strategic place. Both in terms of the importance of the customer and the location, the logistics convenience, that is one company we cannot afford not to supply, because that will immediately affect our production if supplies there are constrained. It is neither in our interest to curtail the supplies, nor is their interest to have lesser supplies.
Accordingly, we are going ahead with the full-fledged supplies, and the payments are received being at a 45-day lag because the bills are being discounted. As of now, RINL has been honoring 100% of their discounted bills, which they have the agreement with the bankers. Which I do not know what is the time limit of their honoring, but nothing has been recourse to us last year or this year.
Noted, sir. Sir, my second question pertains to our logistics. Has the doubling of railway line been completed? If not, by what time it would get completed, and how much extra evacuation it can provide?
Out of 131 km, only two sections are left. One section is expected to be completed this month end. One final section that is between Bhansi and Bacheli will get completed in the month of December because there are a couple of bridges that needs to be constructed there. By December, we will be able to do it. Once it is done, now also, you see, we are doing on an average more than 20 rakes and on peak around 23, 24, 25, 26 rakes. We have done 30 rakes on an odd day, on a good day. The capacity, of course, will increase to around 40 million tons immediately once it is done from the present 28-30 rakes. Then as and when the railway completes this doubling beyond Jagdalpur, which railway is doing at its own cost.
I guess around 50 million-60 million tons, at least 60 million tons can be taken through this route, if not higher, depending on how the railway operates the line.
Noted. Sir, our guidance of 60 million tons, is it contingent on the completion of this railway line, or even without this we can actually dispatch up to 60 million tons?
We'll not be able to do 100 million tons without this, but 60 million tons we can.
Noted, sir. Lastly, on our CapEx side, basically, for the critical mineral or rare earth, just two parts. Firstly, has the government told us anything that we would get in the India on a nomination basis, or we have to bid like anybody else? Secondly, do we looking at the abroad and which critical minerals in that sense? What is the total amount which we think would be comfortable investing in the critical mineral?
Now-
Last three parts.
Let's take this in three parts. Critical minerals and rare earth within India, I think we are not very confident of having too many leases. Of course, we have entered into an MoU, as you know, with the Gujarat Mineral Development Corporation, and they have a rare earth mine in Gujarat, which we plan to jointly develop and then create processing facilities jointly. We are in advanced level of talks with them to get this operation as fast as possible. Our main source of critical mineral and rare earth is essentially abroad. Not that too many assets are available, but wherever they are available, we are very aggressively pursuing them. Obviously, the success of that cannot be predicted as of now.
The profitability of such ventures, as of now, it cannot be predicted because we really don't have anything concrete on the table except for the proposal with Gujarat Mineral Development Corporation. Except for that, it is more that we are aggressively looking for it. We are scouting assets. It will be very difficult to give you a guidance about how profitable it is. We know that rare earth and other critical minerals are the future. As a mining company and as a national mining company and as an all-mineral company, National Mineral Development Corporation, we realize that these have to form a very important and a substantial part of our mining portfolio.
Noted, sir. I am not asking for the guidance on the profitability. Since we are looking abroad, what I was looking actually is the amount of CapEx which we are comfortable spending. Any threshold on the maximum CapEx which would go for the critical mineral side?
That is again a very speculative thing. It depends on the asset that we finally are in. We are looking at a lot of assets. How many of them will reach the last stage, we are not very sure. Only once we get to an asset level where you enter into a price negotiation, you can have that. For example, I might be looking at 10 assets, but I'm sure that all of them will not go to the level of a price negotiation and procurement. Also it will depend on the size of the asset. It is very speculative right now to even second guess. I think overall, the CapEx on acquisition, the back of the envelope calculation is wherever we stand today, as of today, we should be spending INR 2,000 crore-INR 3,000 crore on acquisition of assets abroad this year.
Noted. Sir, lastly, if I look at the average price increase in the iron ore, it doesn't reflect the full extent of the price increase. Currently, what kind of lag which we are experiencing in passing on the price, and how should we look at the average price realization for the Q1 FY 2027?
I think the pricing would be more or less stabilized, because if you see, the steel prices were very strong after December. Up to December, January, February, the steel prices were very. It had a northern movement. Then March it stabilized. March and April, it has reasonably stabilized. I think we are in some period of price stability, both in terms of steel and consequently in terms of iron ore as well. I don't see much volatility in the very short term.
When you would see a sharp increase in your average realization, right? Because of the lag effect of the price rise which you have taken.
Slight lag is always there because we take into consideration a lot of other factors as well while deciding our prices. It is not only steel prices. It's not directly linked or proportionately linked to that. We have other factors, international prices, the prices of our competitors, the demand appetite, and the logistics where we can supply and where we cannot, and all those things. These are multiple variables come into play. To say that there's an absolute lag, I don't think it would be a very accurate projection of the facts. We take a call every month at the earliest. This year also we'll take a call. This month also in a couple of days we'll take a call about the prices. They would be fairly range bound. I don't expect a sharp increase. They would be rather range bound.
Noted, sir. That's all from my side. Thank you for answering them, and all the best for future.
Thank you.
Thank you. Next question is from the line of Siddharth Gadekar from Equirus. Please go ahead.
Hi.
Hello. Go ahead.
Siddharth, please go ahead. As there is no response, the next question is from the line of Mr. Vinit Thakur from Plus91 Asset Management. Please go ahead.
Hi, sir. Congratulations on great set of numbers. Sir, I just needed a clarity on the other operating revenue from HR coils. Would it be a continuing effect going forward or it was just the trading effect from NMDC Steel?
That I had already mentioned in the answer to the first question that it was essentially the trading of steel business was essentially a temporary measure. It's been done and dusted. We have had no transaction of that sort in Q1 as of date. We don't see any transaction happening in Q1 this year. Hopefully, such transaction would be very minimal, if at all it happens this year. I think, I've already answered that previously, and that is that.
What would be our CapEx going forward for next two to three years?
This year, we expect CapEx of around INR 6,000 crore. That is what my own assessment is. Going forward, the next two, three years, it will be in the range of INR 7,000 crore-INR 10,000 crore every year for the next two, three years. You see, most of the works are under execution, and a couple of major works are just under award. I think we should be able to award those major tenders worth around INR 15,000 crore, INR 16,000 crore or INR 20,000 crore by the end of this month or maximum next month. These will come into peak execution stage about next year only. This year, the guidance will be around INR 6,000 crore-INR 7,000 crore. INR 6,000 crore would be more realistic. Next year on, maybe we should be able to touch the magic figure of INR 9,000 crore-INR 10,000 crore.
The idea is that we have to spend this INR 40,000 crore-INR 50,000 crore within the next three years to reach our desired capacity level of 100 million tons. We are right now completely geared towards capacity expansion projects only, execution of capacity expansion projects only.
Sir, to reach 100 million tons, would we be adding new mines, or would we be doing a capacity expansion in the existing ones? What would be our pathway?
Kirandul, for example, has done last year around 21 million tons. Kirandul is expected to go up to 30 million tons by the end of the decade. Bacheli did around 18 million tons, 18 million tons-1 9 million tons. That will go up to 35 million tons by the end of the decade. Apart from that, Kumaraswamy, the Karnataka sector will stabilize at 17 million tons because of regulatory issues, because we don't expect more MPAP levels. We got two new mines, that is Deposit 4 and Deposit 10 in another three to four years, which will reach peak rated capacity. So that's 7 million tons in Deposit 4 and around 10 million tons and plus 10 million tons in Deposit 13. So we are pretty confident of reaching 110 million tons, if not 100 million tons by the end of the decade.
Sir, one last question. You mentioned about blended iron ore as a next potential game changer for the company. Could you just expand more on that? How and when would we be able to?
Not only be a game changer for the company, it will be a game changer for the country in the way it consumes iron ore. You see, worldwide what happens is that most of the iron ore that is sold is branded in the sense that specifications are absolutely adhered to. If you are buying, let us say, an RTX or a Newman High, you know exactly what Fe content, exactly what silica content, exactly what alumina content, exactly what phosphorus content. You can then calibrate your blast furnace for maximum efficiency for such ore. In India, it is not there. One consignment from my mine or any other mine would be of a particular Fe. Fe is anyway still maintained within a very narrow range.
The silica and the alumina and the phosphorus and the other elements tend to vary much more depending on how and where I am mining. That's not only true for NMDC, but that's true for all the miners in the country because we don't have blending facilities because Mother Earth is Mother Earth, and it will give iron ore. The idea is to store it somewhere and then mix various types of iron ores to come to an absolutely very narrow band of specifications which does not change. That is what we call as branded iron ore. You have IOCJ from, let us say, Vale. When you buy an IOCJ, you know exactly that this will be my Fe, this will be my silica, this will be my alumina. We have studied this phenomenon for the last three years.
The board has sanctioned INR 3,000 crore for the blending yard at Vizag, That will be our first output, would be the branded iron ore from there, which I'm sure will fetch a substantial premium in the market because it increases blast furnace efficiency very substantially.
Sir, could you explain the process of how do you achieve the blending process? I would have zero idea about how would this economics of this work.
Standard process which is followed worldwide.
Okay.
Vale has huge blending yards, let us say at Malaysia and Sohar, in Malaysia and in Oman. This is a process which is not very cumbersome. You have different stockpiles of different grades and then decide on what would be the recipe for mixing. It is something that is done everywhere. It is done in Australia, it is done in Malaysia, it is done in small scale at various locations in China, in Oman, and all. It's something that the world already does everywhere. It's just that it was not there in India. We are bringing what the world does now to India, and that is why we had to procure that huge parcel of land there. About more than a third, almost a half of that land would be used for this blending yard purposes.
Okay, sir. Thank you so much.
Thank you. Next question is from the line of Tushar Chaudhari from Prabhudas Lilladher Private Limited. Please go ahead.
Yeah, good morning, sir. Congratulations on a great set of numbers, and the achievements on volumes. Just wanted to continue on your discussion on Deposit 14 and NMZ, 1 million tons each you said next year. All the CapEx which you had talked about, downhill conveyor and new crushing plants at Deposit 14 and Deposit 5, are these both completed as of now or we will complete it by the end of this year?
Deposit 14 and NMZ, additional 1-1 would be through our existing infrastructure only.
Okay.
We have applied for additional EC for 1 million tons in both these mines, and we expect to get them, and we will be actually sweating our existing assets to achieve this. Of course, the new infrastructure that is being built for Deposit 14 and 14 NMZ and 11 and 11C, it will take another year and a half to get completed. Of course, at that time, the production capacity would increase substantially by 5 million-6 million tons. But this year, it is by our existing asset. Deposit 5, there was a slight capacity expansion going on in one of my downhill conveyors. It is expected to get commissioned in June end or July. We can easily do 12 million tons out of that.
There's only one small bottleneck which will get commissioned in this month or maybe early next month. We are good to go for 12 in Deposit 5. Rest of it, of course, after 60 million tons, the further increase would either be on NSL or only after the infrastructure is completed.
Completed. Right. Sir, the pellet plants which we talked about at Vizag, what is the status on that?
Pellet plant at Vizag is essentially on a drawing board stage. The pellet plant and the slurry pipeline will get commissioned by end of June or maybe at best in July. The 15 million ton slurry pipeline that we are building from Bacheli to Nagarnar and the pellet plant at Nagarnar and the grinding mill at Bacheli, this entire system would get commissioned by this month end or maybe by around mid-July. That is what we are looking at. They are currently in pre-commissioning trials. Once these pre-commissioning trials are started and the heating is started, I think the mechanical completion of the plant is over. The mechanical completion of the pipeline is also over. Various pre-commissioning trials and testings are being done. We'll go in for the commissioning, I think, by this month end or something like that.
The Vizag pellet plant, of course, it is only at an ideation stage. We will build one, but first we'll need to sort out the route of the slurry pipeline, whether it will go from Nagarnar to Vizag or whether it will go directly from Kirandul to Vizag. That's the question that we are looking at. Once that is sorted out, we'll be planning.
Okay. Sir, this KIOCL, 3 million ton which we are running, right? That is running at what utilization now?
Last year we did around 2.2 million ton, if I'm correct. 2.4 million ton I think we did last year. This year we plan to do around 3 million ton. We are trying to make again for the first time in India a DR-grade pellet. We have already achieved around 66.5% Fe content pellet. That we have already achieved. The idea is to get DR-grade pellets made out of there. Hopefully by Q2 we should be able to have a greater clarity on our ability to make DR-grade pellets at KIOCL. We have been successful till 66.5% Fe. Another 0.5% Fe and we are done. That's our aim right now. We'll do 3.3 million ton out of KIOCL.
Okay. Sir, lastly on customer side, are we tying up incremental plants? A few of the existing customers have formed JVs and any status over there? Will we be supplying to those plants or?
There's no doubt the plant usage, there has been a huge amount of capacity expansion in the secondary sector in the Raipur area where we are the dominant supplier. I think a huge number of new plants have come in last year and capacities of existing plants has also been substantially increased. That's one. I think our big customers have huge expansion plans. All our big customers, whether JSW or AMNS or JSPL or NSL and Vizag is also performing to optimal level, and all our existing customers have very substantial expansion plans. I don't think demand would be ever a problem for NMDC, especially the quality of ore that we produce, simply because of the low phosphorus that we have. I don't think demand is an issue at all, even for 100 million ton production.
Right. Great. Thanks a lot, sir. Best wishes.
Thank you.
Thank you. Next question is from the line of Rajesh Bhandari from Nakoda Engineers. Please go ahead.
Yeah. Congratulations, sir, for the very good numbers.
Thank you.
Yeah. Sir, as you explained that in 2027, we'll be coming up to 60 million tons.
Yes.
End of the decade, you said 100 million tons. We are left with 2028, 2029, and 2030. Will we be able to come to 40 million ton expansion?
Oh, yes. Most of these are either under execution or are under the final stages of award. Deposit 5 will go up from 12 million tons to 20 million tons.
Hello?
Participants, the management line has been disconnected. Please hold till we connect the management back. Participants, the management is connected back.
I think this 40 million tons, the infrastructure for that is being created, and we are following this up very intensely. I think going to 100 million tons by the end of the decade is something that is evidently possible.
[Non-English content]
I just answered my last question that market is never a problem for NMDC.
Yeah.
My existing big customers, who are the finest customers like JSW, like AMNS. AMNS is coming up with a 10 million tons, 7 + 10, 17 million tons, 40 km from Vizag.
But-
JSW is increasing its capacity very substantially. JSPL is doing so.
They are coming with their own mining also, sir.
It doesn't matter. Our product, they will still require because their requirement is huge. They cannot meet their through their own mines, they cannot meet it only exclusively through NMDC. We have studied that very closely, and I think that selling 100 million ton is not a big deal.
Okay.
Especially now that we end up by that time having around 3 + 7 , around 15 million tons of pellet-making capacity at that time.
Yeah. No, that selling 100 million ton is not a problem, is a very good news, sir. It's a very good news, even for the investors and for NMDC.
Sir, our phosphorus-
Yes, sir.
Our phosphorus is 0.05. India has no ore. Even if you have full capacity, you will need my ore.
[Non-English content] I was working with McNally Bharat.
Very good.
[Non-English content] NMDC is one of the best iron ore company, no doubt about it.
Thank you.
[Non-English content]
Yes.
In that blending, what exactly we will be doing, sir? Where we will be selling?
Vizag gives us the double advantage of having a few very big steel plants in its vicinity. RINL, Anakapalli plant, then the Steel Exchange India. It has a huge local captive market, and also it gives us the opportunity to use coastal shipping to reach western markets also, which we are doing today.
Yes.
We have coastal market on the western side, which is being serviced through Vizag today. Through Vizag, I have the liberty of accessing the local market as well, as well as the entire coastal market.
In India.
Yes. In India.
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No, with 30% export duty, it doesn't make too much of a sense to do that. If we have to export, it should be pellets.
Do we have the permission kind of a thing?
We don't need the permission. You pay the duty and you do it 30%. It doesn't make economic sense.
Yeah. It doesn't make economical sense. I agree, sir. [Non-English content]
Both my mines are located 12 km from each other. It is in the Hazaribagh district.
Okay.
They are located 12 km from each other. There is a lot of synergy.
This will be open cast or underground?
Both are open cast mines. Both Tokisud and [audio distortion] are open cast mines.
Sir, okay. Dhanbad, basically, BCCL is, as it is, totally underground mines.
No. They are all open cast mines. Within three years, we will have a coal top line of sales of not less than INR 5,000-INR 8,000.
Yes, sir. [Non-English content]
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Yeah. Mining cost will be very low. It's a very good news, sir. When will this come into production, sir?
[Non-English content] We have opened it. That's 2.3 million tons.
That is a normal mine.
That is a normal thermal coal, that's still profitable. The coking coal, we hope to start the operation by end of Q3 because certain amount of regulatory approvals are still pending for that.
You mean to say Q3 FY 2027?
Rajesh Sir.
No.
Only this last question. What will be its capacity, sir?
What?
What will be the capacity of coking coal?
Peak rated capacity is 8 million tons.
Eight?
Eight.
Oh my God. Oh, okay. Very good, sir. Congratulations and all the best.
Thank you.
Thank you. Next question is from the line of Suman Kumar from PhillipCapital. Please go ahead, sir.
Good afternoon, sir. My first question would pertain to just for everyone to understand, what would be the current total EC capacity of NMDC as on date, and in FY 2027, in this financial year, where can we look at our EC capacity by, let's say, FY 2027 exits? That would be the first question. Second question, can we throw some color regarding the exact prospects of the legacy of what is exactly happening in Australia, and whether that gold mining that we had talked about, what is the current status, and the existing abroad investments?
Right. Regarding the EC capacity, you must know that there are two things in EC capacity. One is EC per se, the other is the operational aspect, which is called the CTO or consent to operate. Now, we have an EC capacity of 64.8 million tons, but a CTO of around 55.4 million tons. We have asked for an enhancement of CTO in three places to about 3.32 million tons. We'll have a CTO of around 58.8 million tons, which is exactly what we want to do this year. If you know that in FY 2026, for the record and for the understanding, all our mines touched the EC capacity except one Deposit 5. That too because we got the enhancement in deposit in EC late through the year.
As on 1st April EC, we have touched the EC capacity of all the mines, and that is the first time that has happened for any company in India. In India, all the mines owned by a company touching EC, it has never happened in iron ore. We did that, and this year we expect to repeat. Once we get the CTO of around 58.8 million tons, we expect to repeat that feat this year. This is a unique and a very commendable feat which has never ever happened. This year, I'm sure that we'll be able to do it. As you know, our production as compared to last year for the first two months is around 15% higher. We have already touched almost 10 million tons in the first two months as against 8 point something, 8.2 million tons or something last year.
This month itself, I think we have already declared to the stock exchange, I guess, so I can say this today is first. We have done 5.3 million tons against what we did 4.4 million tons last year. We are well on our way to achieve 16 million tons. For the first time, we have touched 5 million tons in Q1. We have crossed 5 million tons in one month production in Q1. 58 million tons would be our CTO against EC of 64 million tons, and I'm confident that we'll touch this. Apart from NCL would be around 1.5 million tons, as I said, Deposit 4 and Deposit 13. That's the game plan for this year. Regarding legacy, we had produced as per our requirement goal for the last two years. This year, the operations just broke even.
Now we have curtailed our production, and we are now actually going full hog on exploration and proving of further assets because we have realized that given the gold prices, unless you have your own refinery, making it very profitable becomes very difficult there. The idea is now to prove enough resources. We have the additional mining leases in nearby areas, which we are exploring. Once we have enough resources, we are planning to put up a small refinery there so that we can refine our own gold and make money. Even after producing so much, it was only at almost around breakeven level, essentially because the refining costs in the market have gone very substantially up.
We need a refinery there, and for that, instead of small volume mining, we need large volume mining, for which we need to prove resources in our adjoining mining leases, which we are doing right now.
Sir, in terms of the job work arrangement for our pellets with KIOCL, does that continue? What are the prospects of transitioning to high-grade pellets? Can you please throw some light on this?
We have already got 66.5 grade Fe. We have sold a couple of consignment on that. The idea is to come to around 67 grade Fe. We did around 2.4 million tons or 2.6 million tons last year. This year, we'll do 3 million tons- 3.3 million tons this year. The idea is to be able to make 67 grade pellet, which is the DR grade pellet, and then we'll be the first time to make it in India. The current premia is around $20-$30 for the DR grade pellet. That is what we are targeting to achieve that.
Thank you, sir.
Thank you. Next question is from the line of Netra Deshpande from Mirae Asset Sharekhan. Please go ahead.
Yeah. Am I audible?
Yes.
Yeah. Congratulations, sir, for the great set of numbers and the new launching segment of coal and other minerals. My first question is about the average domestic iron ore realization that has slightly declined 4%. Hello?
Yes.
Yeah.
Yes, please.
Based on the ongoing expansions and the strong order pipeline which is there, can you please give the guidance for the EBITDA per tonne and the blended iron ore realizations per tonne for the FY 2027 on a quantified basis, about also the EBITDA per tonne.
I think, as I have said, that the prices are going to remain range bound. I don't think there is going to be this financial year, especially this quarter. I don't think there's to be any volatility, either upside or the downside. This will be a range bound movement around this time also. We expect to maintain our EBITDA at around 42%-43% this year. This is our expectation.
Okay, sir. Sir, about the higher employee cost due to the government pay revisions, any other kind of contractions in the margins as yet that you are looking for?
Sorry, I didn't understand your question. Please repeat your question.
About the higher employee cost, which is expected due to the government pay revisions in the next year. FY 2027, that is going to get adjusted, so what would be any other kind of impact on the contracts?
I think most of our employees are in non-executive cadre, and their pay revision is being worked out right now. It is under the consideration of the ministry. We always account for the higher wages. It has already been provided for. The increased amount of wages is already provided for in the books of accounts. There's not going to be any large-scale effect on that because whatever has been proposed for enhancement has already been accounted for from 01/01/2026 itself. There's not going to be any marginal effect on that. So far as the executive is concerned, yes, our executive are lesser in number. It is only around about 1,100. We will be providing for that from 01/01/2027 start providing for that. I think the impact would be not very substantial.
We've been able to curtail our, in fact, bring down our production cost from INR 1,000 odd per tonne in Bailadila to around INR 800 per tonne this year. We expect to have more such efficiency gains, and we expect to reduce our cost per tonne even more. The effect would essentially be very marginal.
Okay.
It will be offset by efficiency.
Okay. What would be the debt level positions, like net debt positions would be for the FY 2027?
As of now, there are no immediate plans of leveraging our balance sheet.
Okay.
The current visibility is that we should be able to service all our CapEx and acquisition requirements through internal resources. That is the visibility we have as of now. If required, going forward late this year, we will think in terms of leveraging it only if certain big-ticket acquisitions fructify. Some big-ticket global acquisitions fructify . Otherwise, I think we are fairly comfortable in terms of servicing our CapEx requirement and current acquisition requirements.
Okay, sir. Got it. Sir, my last question is about the environmental clearance. As expansions which are happening about the key concern, there are a lot of projects like the Bacheli and [Bher] mines. What will be the timeline for receiving any approvals? Can you share some insight on that?
No, sir, they have been applied for. I think we will have them well before these expansion projects actually get completed or even get started. We'll have those in place well in time. In a mining company, you see it's a continuous process. Asking for enhancement of environmental capacity and then asking for forest clearances. It's a continuous process. Sometimes you require it for dumping, sometimes you require it for excavation, sometimes you require it for others. It's a continuous process, and I don't think that's a red flag as of now.
Okay. Sir, last it is coal mine timeline. Can you please expected ramp-up timeline and annual volume target for FY 2027 for coal mine? Can you please tell again what will be the target?
Tokisud is for about 1 million tons for coal. Rohne, I don't think the mine will start in Q3, but there will be no commercial production because there will be a lot of overburden removal, et cetera. The peak rated capacity we expect to achieve in one and a half years to two years maximum. In Tokisud it will be 2.3 million tons and Rohne it will be 8 million tons.
Okay. Thank you so much, sir.
Thank you.
Thank you. Due to time constraints, that was the last question of the day. I now hand the conference over to management for closing comments.
Yeah, I think the Director of Finance, Mr. Anurag Kapil, would make the closing comments. I might have missed something which he would like to add, and I'd request Kapil to please give the closing comments.
As you have already heard that NMDC is on that path of 100 million tons with proper planning. In all probabilities, all the questions have been answered very, very satisfactorily. The performance in all the things like production, revenue from operation, profit before tax, profit after tax, and sales has surpassed all the expectations this time. I really thank all the investors for the productive questions, and I hope that all of them have been answered satisfactorily. I've nothing more to add on that because almost everything is covered. Our performance is covered, our future plans are covered, our foreign acquisitions are covered, and our diversification in both coal and other minerals is also covered. Thank you.
Thank you. On behalf of PhillipCapital Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.