India to sell 10pc stake in NMDC

OREANDA-NEWS. India's federal government is planning to sell part of the state's stake in iron ore mining firm NMDC.

Delhi is seeking merchant bankers to handle a public issue for selling 10pc of its 80pc stake.

NMDC is unlikely to issue any fresh shares in the offer, so the amount raised will go to the government to be used for reducing its fiscal deficit and funding social sector projects.

NMDC, which roughly produces a fifth of India's domestic iron ore, is currently aiming to expand its production capacity to 50mn t/yr over the next few years from the current 32mn t/yr. None of NMDC's mines have faced any production restrictions, unlike other mining firms in India, while its expansion programme continues to progress. The company is also building the 3mn t/yr Nagarnar steel plant in central India's Chhattisgarh state.

The government last month sold a 5pc stake in the country's largest steel producer Sail as part of its \$7bn divestment target for the 2014-15 fiscal year ending 31 March, cutting the state's stake in the steel producer to 75pc.