Iron ore producer NMDC begins coal mining operations in Jharkhand

Iron ore producer NMDC, as part of its diversification plans, has commenced mining operations at the Tokisud North Coal Mine in Barkagaon Block, Hazaribagh district of Jharkhand.

The annual production capacity of the mine is 2.30 million tonne of thermal coal. The date of commencement of commercial production will be intimated in due course, NMDC said in a filing on Friday.

The State-owned NMDC has identified 10 minerals as part of diversification strategies. While maintaining its leadership as the largest iron ore producer in India, the company is keen on establishing itself as a quality steel producer (through NMDC Steel) as well as expanding business by acquiring and operating various iron ore, coal and other mineral assets in the country and abroad. The strategy is to diversify the portfolio to enhance resilience against market volatility, according to NMDC.

Tokisud North Coal Mine has a project area of 585 hectare and is one of the two coals assets – coking coal block Rohne in the same State is the other — allotted to the company by the Union Ministry of Coal. The Ministry had declared NMDC as the successful allottee of the Tokisud North coal mine on December 16, 2019 with the allotment agreement and Allotment Order signed subsequently.

In an announcement following the allotment, the company said the Tokisud North coal block has extractable reserves of about 52 MT of thermal coal and planned production capacity of 2.32 MT per annum. The Rohne block has extractable reserves of 191 MT and planned production capacity of 8 MT per annum. Both the blocks are located at an aerial distance of about 10-15 km, in the same district of the State.

During an investor call last year, NMDC leadership said coking coal figures prominently in the hyper aggressive expansion mode the company wants to pursue as a miner, especially abroad. “It has been one of those minerals where we have been mandated to look very closely and aggressively,” a senior official said, adding besides coal, copper, lithium, cobalt, nickel, gold and bauxite are some of the other minerals the company will be prospecting. NMDC shares on Friday closed 2.39% at ₹76.40 each on the BSE.