NMDC Limited ($526371)

Ladies and gentlemen, good day, and welcome to NMDC Limited Q4 and FY '26 Earnings Conference Call hosted by PhillipCapital. [Operator Instructions] 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, on the call. I first thank NMDC for giving PhillipCapital the opportunity to host today's call. We have with us from the management today, Sri Amitava Mukherjee, the Chairman and 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. And 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 performance in FY '26 has been rather encouraging. We have touched 53 million tonnes of production. We crossed that. Our sales revenue has grown to [ INR 31,000 crores ]. And we are all now ready for the Maharatna status [indiscernible] now we fulfill all the requirements of our Maharatna company. And despite slightly sluggish prices, we've been able to achieve a PAT 11% growth in tax 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 tonnes by the end of this decade. . And in that journey, I think this year, we will be targeting 60 million tonnes, which we hope to achieve around the good news is that the more encouraging thing is that we've been able to open a core mine in Chakan, which gives us a new mine as well as a new geography. And after 50 years, we have been able to open iron ore mine that is deposit for in Baladila. That is, of course, under the NCL banner, NMDC Ciner where we have 51% stake. And very soon, we hope that we will be opening the other -- this financial year, we hope to open the other iron ore mine, which is in [indiscernible] and also the [indiscernible] block in [ Chakan ], which is a coking coal block. So there's a lot of action that is happening. And obviously, we are also pursuing assets abroad A few of them are very advanced stages of acquisition. Obviously, we cannot disclose this because of confidentiality agreements. But this year, we hope to acquire a couple of assets abroad as well. And the cut this year has been around INR 3,300 4, which is an all-time high CapEx because if you leave out the land actions, we hope that this year, we will 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. So we are going on our way to get to 100 million tonnes by the end of the decade. And my colleague, Mr. Anurag Kapil, Director Finance is also here. He might like to add something to what I have said. Anurag, please .

Good morning to you all. This is a tremendous performance, which NMDC has given in the last -- in the previous financial year. As [indiscernible] just mentioned, we have surpassed all the expectations and cost in logical figure of production, which is 50 million tonnes. The growth of around 30% in various [ managers ] is really a pathway which we'll be making it possible to achieve 100 million tonnes by 2030. And the more important part is the citification part of NMDC, which is like as just mentioned, regarding coal and other lenders. Also, the acquisitions of various members [indiscernible]. We have also opened a subsidiary for rare case will be a....

We actually also opened a subsidiary, which is now completely dedicated to areas and other critical minerals. So we are taking that -- those critical requirements of the country very seriously, and we hope to have actually breakthrough in that as already very soon. So we can take questions now? Is that -- if that's okay.

[Operator Instructions] First question is from the line of Mr. Amit Dixit from Goldman Sachs.

First of all, congratulations for great performance, particularly on operational front, achieving about 50 million tonnes of production and sales. A couple of questions. The first 1 is NMDC steel, if it's still possible to mention the volumes. And 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. But for this quarter, if you can let us know the quantity that we sold. And also, what are the basic terms for this , this number appears in cost as well as revenue. So I just wanted to get a little bit of more clarity on this for [ protection ] purpose.

Okay. So this was essentially an agent made for a very specific requirement of NMDC steel where they were facing cash flow. So we stepped in and we were doing trading business on -- 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 key as and when if there's a cash flow issue at NMDC Steel, and we generally tend to step in and by HR coils than selling the market. However, because that is at that time when the steel was, as you know, is under the same management. And at that time, the marketing was being done by sale and there was a lag in payment of -- in realization of materials sold. So at that time, we had to step in. But I don't think that, that would be triggered right now. that was a very low volume business. If you see our [ EBITDA ] has come down from 42% to 33%, essentially because of steel business. If we take this iron ore business standalone, our EBITDA is at 42%. So that has not changed. But because of the steel business in the last quarter that we had to do, which was essentially trading, it has come down. That was a onetime measure, I do not think that this quarter, definitely it is not required. Maybe this financial year, it will be very rarely used, if at all, if it is required. .

Got it, sir. So the second question is essentially on commutation for opening deposit for. I think after a long time, finally we see it's getting under Yes. Yes. So just wanted to understand the deposit for capacity when we will hit the rated mining capacity and also deposit that's also a very welcome thing -- and on coal mines, [ Roni and TSO ], how do we see the production ramping up, if you can detail it out 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 in -- and this year, I think the guidance would be around 1 million tonne out of deposits and next year, it will be 2 million tonnes. -- followed by when the infrastructure is already by another 1.5, 2 years, and it will be ramped up to 70 million tonnes, which is the peak rated capacity of deposit score. 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 5 months soon. So I don't think that we should be able to -- we will be able to do more than 0.5 million tonne out of deposit 0. But next year, we will do around 2 million tonne out of deposit 13. And then the fee credit capacity initially is 10 million tonnes. But we plan to ramp it up to 20 million to 21 million tonnes in 4 to 5 years' time. So that is the iron ore sector. Regarding coal, focus, as you know, is already operational. We are removing by this 1 end or maybe in Q2, we should be able to hedge the whole team, and we should be able to now extract coal by -- and our guidance for Q2 would be around 75 million tonnes to 1 million tonnes of coal this year. So it is repeated, as you know, in to 2.3 million tonne. [indiscernible] will take some time to open up because a lot of our approvals are still pending. We hope plan to open it around late Q3. And this year, we don't see a big production out of only because the overburden removal, et cetera, will have to be carried out once we mine is open. But 1 would opened around Q3, end of Q3.

Next question is from the line of Sumangal Nevatia from Kotak Securities.

So first on the guidance of 60 million tonnes. Can you guide mine wise, where are we expecting the incremental 10-odd million tonnes?

Yes, deposit 14 will get 1 extra and deposit -- and then that deposit NZL will get 1 extra. So that's 2 million tonne extra as compared to last year. And commercially, we will be getting around 1.3%, 3% extra because it has a pane capacity of 10%. And last year, we had this MTAP imposed for which I hope that we will be able to get around. So that's around 3.3 million text as compared to mine. So -- and then if we target last year that we could not achieve a deposit 5 instead of well, we have done around 10. So that is in be to extra from deposit file. . So all this totals up to around 5.3 million tonnes. So if we add to 53 million tonnes that we did, so we will end up with NMDC as has around 8 million tonnes. And if we add 1 million tonnes from deposits and another 0.5 million tonnes from deposit 13. So as a whole, as one, including [indiscernible], would touch 60 million tonnes. This is the guidance. .

Understood. Understood. Sir, when deposit for ramps up, will that be replacing the supply, which we are currently due to the steel plant?

So these are all fungible. These are all full. It's not -- nothing is linked to any -- no plant is linked to any mine supply is agile, depends on the production, it depends on the quality and different on the requirement of the steel and most importantly, it depends on the logistics at that point of time. For example, today, we are supplying to NSL from Kirandulas well as [indiscernible]. We are supplying material from deposit 14 and deposit 11, deposit 5 also, deposit 10 also. The supplies are fungible. .

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 because initially, most of it would be in auction. So that would be substantially higher prices than we do fit. So there, I think approximately that should account for around INR 500 to INR 600 crores, I think. And if you take an average of 13% to 14%. So that would be forced her revenue. But these are all very approximate figures. We'll have to see how we go along with it, what prices are realized on offshore and local sales. These are very preliminary and approximate figures.

Okay. sir, what will be the grade? And in terms of royalty and all the government duties, what are our [indiscernible]?

[indiscernible] If I refer [indiscernible]. Be great. .

Understood. Understood. Sir, with respect to RINL, I mean how confident we are on the recovery of all the receivables? And we've -- we are paying around INR 1,500-odd crores for the land lease, INR 1,800-odd acres. So 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 crores for creation of a blending yard. You see India we -- no company has ever manufactured or supplied branded iron ore, unlike in the international market, you have [indiscernible] Selling RPX and RF and BHP selling Jimlar fines and a [indiscernible] high and Vale selling IOC, these are all banded iron ore. So India has never tasted that. So NMDC will be the first company in 3 years trying selling banded iron ore. And Board has already sanctioned an investment proposal for INR 3,000 crores approximately for making a blending yard at Vitas, where we will be making this blended iron ore of a consistent quality, which India has ever seen. So we expect that to be a game changer in fact, in the iron ore market in India. So 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 study pipeline once the mode of the serve pipeline is decided. And 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 and or any other critical mineral processing zone that might be required because we are aggressively looking for other meals as well and will require processing. And that is a for a wonderful land parcel of around 1,100 acres. So I think all these NMDC future expansion plan is dependent completely on the Visa plant parcel. We have big plans. One, Board has already [indiscernible] which I think will be completed in around 2 years' time, 2 to 2.5 years' time. The rest, of course, will be as we have a long-term plan.

Understood. Just 1 last question. Is it possible to share over what time do we expect to recover all the receivables and the dues from NSL and ?

Now has become profitable as you are aware, that LSL has become profitable. This year, we expect much greater profit because most of the operational aspects have been solved except for one or two. So this year, we hereto make greater profit. So LSL, we see light at the end of the tunnel. I guess it should take about 1.5 years, max 2 to liquidate all the entire amount of selling. If you see NSL demerger expenses was around INR 2,500 crores. It has already been reduced to around INR 1800 crores, INR 700 crore has already been repeated despite such difficult circumstances. And we are doing about INR 100 crores every month. So that should take around 16 to 18 months to get liquidated. And the rest would also get liquidated, I think in a year or 1.5 years. That's sort of problem. [indiscernible], of course, we'll have to have another book what their plans are. We are in touch with Horizon, woefully once it comes around, it is 100% comment to own company. So we don't see any risk, of course, there's a time element to that, but we don't see the risk that.

Next question is from the line of Vikash Singh from ICICI Securities. .

Sir, just wanted to understand any threshold, which we have in order in terms of credit to INL or on a good pace, it will continue. .

No, it will continue as of now as it is done RINL is we have an arrangement of bill discounting with -- so we -- obviously, we're getting that money 45 days lag. And they are over and above what they are considering, they are paying around 10% extra for that. So the liquidation process is on, but it is a little slow. But you see from the business perspective, they consume 7 million to 8 million tonnes of our product and are [indiscernible] in a very strategic place. So both in terms of the important core customer and the location of 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. So it is neither in our interest to start to curtail the supplies nor in their interest to have lesser supply. So accordingly, we are going ahead with the full project supplies. And the payments are received in a 45-day lag because the bills are being discounted. And 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 ordering, but nothing has been recoursed to us last year or this year.

Noted, sir. My second question pertains to our logistics. Has the railway doubling of reselling has been completed? And what kind if not done, by what time it would get completed and how much extra accretion we can provide? .

Out of 131 kilometers, only 2 sections are left. One section is expected to be completed this month end. And one final section that is between [indiscernible] will get completed in the month of December because there are a couple of bridges that need to be constructed there. So by December, we'll be able to do it. Once it is done, and now also, you see we are doing on an average more than 20 rigs and peak around 23, 24, 25, 26 rigs. We have done trades on an odd day on a good base. So the capacity, of course, will increase to around 40 million tonne immediately once it is done from the 2028 to '30. And then as and when the rail rate complete is doubling beyond Jeep, which railway is doing at its own cost. So I guess around 50 million to 60 million tonnes can be 60 million tons can be taken through this lot, if not higher, depending on how the railway operating line.

Okay. Sir, our guidance of 16 million tonnes, is it contingent on the completion of the railway line or even without this, we can actually at up to 60 million?

We'll not be able to do 100 without this, but 60 we cannot.

Sir. Sir, lastly, on our CapEx side, basically, for the critical [indiscernible] just 2 parts, firstly, has the government told us anything that we would get in the India on a nomination basis or we have to update like anybody else? And secondly, do we looking at the [indiscernible]? What is it out ice think would be comfortable investing in this capital ever?

Let me take this in 3 parts. Well, critical windows and rare are within India, I think it's -- we are not very confident of having too many is, of course, have entered into an MOU with , as you know, with Gulati Development Corporation, and they have a rare 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 have get this operation as fast as possible. Our main thrust on critical neither as essentially abroad. Not that many sets are available. But wherever they are available, we are very exclusively pursuing them. . Now obviously, the success of that cannot be predicted as of now. 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 Development Corporation. So except for that, it is more that we are aggressively looking for it. We are outing assets. So it will be very difficult to give you a guidance about how profitable it is. But we are -- we know that rare earth and other critical moment of the future. And as a mining company and as a national mining company, and as all mineral company, National Mineral Development Corporation, we realized that these have to form a very important and a substantial part of our mining portfolio.

No, I'm not asking for the guidance on the profitability. Since you're looking abroad, and what I was looking actually is the amount of CapEx, which we are comfortable spending. So any threshold on the maximum CapEx, which would go for the critical minerals side? .

That is, again, a very speculative. It depends on the assets that we finally are -- we are looking at a lot of assets. How many of them will reach the last stage, we are not very sure. So only once the -- you get to an asset level when you enter into a price regulation, you can have this. So 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. And also, it will depend on the size of the asset. So it is very speculative right now to even second guest. . But I think overall, the CapEx on acquisition, the back of the envelop calculation is wherever we stand today as of today, we should be spending INR 200 crores to INR 3,000 crores on acquisition of second this year.

SP29453998 Okay. And 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. So currently, what kind of lag we are experiencing in passing on the price? And how should we look at the agreed price realization for the Q1 FY '27?

I think the price would be more or less stabilized because if you see the higher steel prices were very strong after December -- and up to December, January, February as the steel prices were very, very on the it had a mortal movement. And then March stabilized. March and April reasons. And 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. .

But you would see a sharp increase in your SSL gist, right, because of the lag effect of the price lines which you have taken .

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 cases, the prices of our competitors, the demand appetite and the logistics where we can supply and where we cannot and all those things. So these are multiple variables coming today. And to say that there's an absolute lag, I don't think it will be a very accurate projection of the [indiscernible]. . So we take a call every month at the. This year also will take a call. This month also in a couple of days, we'll take a call about the prices. But they will be fairly range among rather than having I don't it so to shapes, they would be rather range bound.

Next question is from the line of Siddharth Gadekar from Equirus. As there is no response, the next question is from the line of Mr. Vinit Thakur from Plus91 Asset Management. .

Congratulation on great set of numbers. So I just made a clarity on the [indiscernible] from HR costs. Would it be a continuing effect going forward? Or it was a trading effect from NMDC?

That's what 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. And hopefully, such transaction would be very minimal, if at all. it happens this year. So I think I've already answered that previously. And that is that .

What will your CapEx going forward for next 2 to 3 years? .

Yes. Yes, CapEx as around INR 6,000 crores -- that is what my own expenses. And going forward, the next 2, 3 years, it will be in the range of INR 700 crores to INR 10,000 crores every year for the next 2, 3 years. because 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 150 crores, INR 15,000 crores or INR 300 crores by the end of this month or maximum next month. So these will come into peak execution stage about next year only. So this year, the guidance would be around INR 6 cores 7,000 crores more realistic. And next year on, maybe we should be able to touch the magic figure of INR crores to INR 10,000 crores. So the idea is that we have to spend this INR 40 crore, INR 50,000 crores within the next 3 years to reach our desired capacity level of 100 million tonnes. And we are right now completely be geared towards capacity expansion projects sold in the [indiscernible].

To reach Hydro, will you be adding new [indiscernible] positive expansion in the existing ones to a [indiscernible]?

Cielo, for example, has done last year around 21 million tonnes. Kiranas expected to go up to 30 million tonnes end of the deed. Materis around 18 million tonnes, that will go up to 35 million tonnes by the end of the decade. And apart from that, [indiscernible] will stabilize at 17 million tonnes because of road issues because of we don't expect more LTV levels. And we got 2 new mines that is deposit 4 at deposit 10 in another 3 to 4 years, which will reach capacity. So that 7 million tonnes in deposit 4 and around 10 and plus 10 in deposit 13. So we are pretty confident of reaching 110, if not 100 million tonnes by the end of the [indiscernible].

And 1 last question. You mentioned about Lenoiron ore as a next potential [indiscernible] company, could you just explain more on that what, how and when would be into...

Not only on the company will be game for the country in the way it consumes iron ore. You see worldwide, what happens is that most of these I know that is sold is branded in the sense that specifications are absolutely adhered to. So if you are buying let us say, an RPX or a human high, you know exactly what we contend to exactly what silica content is exactly what alumina content exactly what costs for content. So you can then calibrator blast furnace for maximum efficiency for. In India, it is not there. So on consignment from my mind or any other mine would be of a particular in any way, still maintained within a very narrow rate. But then the silica and the lending and the phosphorus and other elements tend to vary much more depending on how and where I am mining. And that's not only true for NMDC, but it's true for all the mines in the country because we don't have blending facilities because mother arts mother at and it will give more of a particular -- the idea is to store it somewhere and then mix various other iron ores to come to an absolutely very narrow band of specification does not change. And that is what we call branded iron ore. So you have IOCG or, let us say, value. So when you buy an IOC, you know exactly that this will be this will be very silicon. That is what we are now -- we've studied this phenomena for the last 3 years. The board has sanctioned INR 3,000 crores on the lending yard at Visak and 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.

And sir, could you explain the process of how we achieved in the new business, like is there a question there has to be so I would have to -- how would we lose on this one? .

Segment professor worldwide. So Vale has a huge blending yards Malaysia and Sohan Malaysia and in Oman. So there's a process which is not very cumbersome. You just -- you have different stocking of different grades and then decide on how that -- what would be the recipe for mixing and it is something that does everywhere as in Australia, don't Malinas done in small scale and various locations in China, it is done at Oman and all. So it's something that the world already does are well. It's just that it was not there in India. And we are bringing that what we want us to announce India. And that is why we had procured that huge parcel of land there. 1/3, almost half of that land would be used for the pending yard for those. .

Next question is from the line of Tushar Chaudhari from Prabhudas Lilladher Private Limited.

Congratulations on great set of numbers and the achievements on volumes. So I just wanted to continue on your discussion on deposit quoting and [indiscernible] each, you said next year. So all the CapEx, which you had talked about downhill conveyor and new crushing plants at deposit 14 and depots, are these both completed as of now? Or it will be -- we will complete it by the end of this year? .

[indiscernible] would be through our existing infrastructure only. We have applied to traditional EC for 1 million tonne in both these lines as we expect to get them, and we will be actually sweating our existing assets to achieve this. So that is without. So of course, the new infrastructure that is being built for deposits and INR 40 million debt and going to take another 1.5 years get completed. Of course, at that time, the production capacity would be substantially by 5 million to 6 million tonnes. But this year, it is my [indiscernible]. . Deposit 5, there was slight capacity expansion going up in 1 of my deconvert, which is expected to end on -- I think it will get commissioned in June end or July and then we can easily do 12 million tonnes out of that. So there's only 1 small bottleneck, which will get commissioned in this month or maybe early next month. So we are going to go for 12 in deposits. Rest effect, of course, unless after 60, the further increase would either be on self or only after the infrastructure is completed in treating.

Sir, and the pellet plants, which we talked about at a, what is the status on that? .

Pellet at that is essentially on a prior stage. The pellet plant as a study pipeline will get commissioned by end of June or maybe at best in July. -- the 5 million tonnes or pipeline that we are building from Bacheli to Nayara and the pellet plant at Tagara and the grinding mill at Maari. The that system will get commissioned by this month and maybe by around mid-July. That is what we are looking at. We are in -- currently in pre-commissioning trials. Once this pre-commissioning trials are started, I think the mechanical completion of the plant is over. The mechanical completion of the pipeline is also over. So various pre-commissioning prices and questions are being done. And then we'll go in from the commissioning, I think by the month end of continuing. And the [indiscernible], of course, it is only at an ideation stage. We won't build one. But first, we'll be to sort out our reroof the carry pipeline, whether it will go from Raganato, directly from Kraton to back with the question that we are looking at. That is sorted out, we'll be planning now.

KCL, 3 million tonne, which we are running, right? That is running at what utilization now? .

Last seated around 2.2 million tonnes, if I'm correct, 2.4 million tonne I think we did last year. This year, we plan to do around 3 million tonnes. And we are trying to make, again, from the first prize in India and Dreamforce. We have already achieved around 66.5 million, 6.5% FE content pellet that we have already achieved. The idea is to get target pellets made out of there. Hopefully, by Q2, we should be able to have a greater clarity on our ability to make [indiscernible] pellets at we've been successful to 66.5% another half a few and we are done. So that's it. But we'll do 3.3 million tonne out of POS. .

Okay. Sir, and lastly, on customer side. Are we tying up incremental plants of the existing customers are formed JVs and what any status over there? Will we be supplying to those plans or?

There's no lot of plants. There has been a huge amount of capacity expansion in the secondary sector in the [indiscernible] area where we are the government supplier. I think a huge number of new plants have covered last year and capacities of existing pads has also substantially increased. That's one. I think our big customers have huge expansion plans. All our big customers in the JSW or AMNS or JSPL or now NSL and [ Vizag ] is also performing to optimal levels. And all our existing customers are very substantial expansion plans. So I don't think demand would be ever a problem for NMDC, especially the quality of work that we produce simply because of the process that we have. So I don't think demand is an issue at all. Even for the 100 million tonne production. .

Next question is from the line of Rajesh Bhandari from Nakoda Engineers.

Yes. Congratulations for the very good numbers. Yes. Sir, as you explained that in 2027, we will be coming up to 60 million tonnes. And then end of the decade, you said 100 million tonnes. Then we are left with '28 and '29 and '30. Will we be able to come to a 40 million tonne expansion?

Yes, most of these are either under execution or under final sales of award. So deposit 5 will go up from 12 million tonnes to 20 million tonnes. The works are already.....

The management line has been disconnected. Please hold until we connect the management back. Participants, the management is connected back.

So I think this 40 million tonnes, the infrastructure for that is being created and following up very, very intensely to 100 million tonnes by the end of the decade is [indiscernible]. something that is eminently possible. .

[Foreign Language]

I just answered to my last question, that market is never a problem for an NMDC. My existing big customers who have defined customers like JSW, ANW is coming up with 10 million tonnes, plus 1, 1 million tonnes particles from [indiscernible] easing its capacity say, per is doing. So all the big customers.

But they are coming with their own mining also.

It doesn't matter what our product, they will still require because their requirement is huge. They cannot meet their through their own mines and they cannot get it only exclusive [indiscernible]. We have studied that. We have studied that very closely and that 100 million tonnes is not a big deal as a set up by that side having a around 15 million tonnes of [indiscernible].

No, no, that's selling 100 million is not a problem. It's a very good news, sir. It's a very good use even for the investors and for NMDC.

[Foreign Language] why you would always -- even if you have for capacity, you will need my ore.

[Foreign Language]

Double advantage of having a few very big steel parts in the [Foreign Language] So it has a huge local captive market. I also gives us the opportunity to use cost piping to reach Western markets also. [Foreign Language] So we have coal of market on the investment side, which is being serviced from VISA today. So if by back through via the liberty of accessing the local market as well as the entire postal market....

In India. [Foreign Language]

[Foreign Language] 30% export duty, it doesn't make too much of a sales to do that. .

But do we have the permission kind of a thing? .

We don't need any permission. You pay the duty and you do at 30%, but it doesn't make .

Yes, yes. It doesn't make it economical sense. I agree, sir. I agree. [Foreign Language]

Both my mines are looking at 12 kilometers from each other. It is in the [indiscernible] so we have located 12 kilometers from each other. There's a lot of synergy .

And this will be open cast or underground?

Those are open cast.

Because [indiscernible] as it is totally underground mines. .

Really, they are all open cast mines. And within 3 years, you will have a cold top line of sales of not less than 5 .

[Foreign Language] Mining cost will be very low. very good news, sir. [Foreign Language]

[Foreign Language] That's 2.3 million tonnes. .

That is normal mine.

That is a normal thermal coal, but that's and will start -- we hope to start the operation by end of Q3 because a certain amount of regulatory approvals are still pending for that. .

The Q3 FY '27? Only this last question. [Foreign Language]

[indiscernible] capacity is 8 million tonnes.

Oh my God. [Foreign Language]

Next question is from the line of Suman Kumar from PhillipCapital. .

My first question would pertain to just for everyone to understand what would be the current total capacity of NMDC as on date? And in FY '27 in this financial year, where can we look at our EC capacity by, let's say, FY '27 exits? That would be the first question. And second question, can we throw some color regarding the exact prospects of the legacy of what is exactly happening in Australia and whether the gold mining that we had talked about, what is the current status and the broad investments, the existing broadens .

Regarding the UC capacity, you must know that there are 2 things in use. One is you see per se. The other is the operational aspect, which is called the CTO, or consent to operate. Now we have an AC capacity of 64.8%, but a CTO of around 55.4%. We have asked for an enhancement of CPO in 3 places to about 3.3 we'll have a CTO of around 58.8% and which is exactly what we want to do this year. So if you know that in FY '26, for record and what we understanding, all our mines touch 3 capacity except 1 deposit side. That's because we got the enhancement in deposit rate in the late through the year. But as on first April, you see we have touched the capacity of all the mines, and that is the first time that has happened for any company in India, all we owned by a company touching easy, it has never happened in iron ore. So we did that. And this year, we expect to repeat. Once we get the city of around 58.8%. We expect to repeat that feed this year. So this is a unique and a very commendable feed, which has never ever happened. So 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 2 months is around 15% higher. So we have already touched almost 10 million plus in the first 2 months as against 8.2% or something last year. This is -- this month itself, I think we have already led to the stock exchange, I guess, -- so I can say this as first, we have done 5.3 million tonnes against that what we did 4.4 million to last year. So we are well on our way to achieve 16 million tonnes -- for the first time, we have touched a 5 million tonne in Q1. We have crossed 5 million tonnes in 1 month production in Q1. So 58 would be against ECR 64 and I'm confident that we'll touch this. Apart from NCL, would be around 1.5 million tonnes as I have said deposits sorry, deposit and -- so that's the game plan for this year. Regarding legacy, we had produced as per our requirement goal for the last 2 years. This year, the operations just broke even. But now we have curtailed our production, and we are now actually going full house on exploration and moving 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. So the idea is now to prove enough resources. Additional -- we have the additional mining leases in year by area, which we are exploring. Once we have enough resources, we will be -- we are planning to put up a small refinery there so that we can refine our own goal and make money. because even after product, it's so much, it was only at around almost around breakeven level essentially because the refining costs in the market have come very substantially up. So we need a refinery there. And for that we need instead of all small volume mining, we need large volume mining for we need to prove resources in our adjoining mining leases, which we are doing right.

Sir, and in terms of the job work arrangement for our pellets with KIOCL, does that continue? And what are the prospects of transitioning to high-grade pellets? Can you please...

Out 5 million 66.5. We sold a couple of consignment on that. The idea is to come to around 7 grade. We will be doing -- we did around 26 million tonnes last year. This year, we'll do 3 million to 3.3 million tonnes this year. And the idea is to be able to make is product, which is the DR grade product. And then it will be the first side to make it in India. We expect the current premia is around [indiscernible] or the rate, that is what we are targeting to achieve that. .

Next question is from the line of Netra Deshpande from Mirae Asset Sharekhan.

Congratulations, sir, for a great set of numbers and the new launching segment of coal and other minerals. And first question is about because domestic iron realization has slightly declined to operation. Yes. So based on the ongoing expansion and the strong order pipeline, which is -- so can you please give the guidance for the EBITDA per tonne has blended iron ore realizations per tonne for FY '27 on a quantified basis, about also the EBITDA per tonne?

I think as I have said that the prices are going to remain range amount. I don't think there is onto be this financial year, especially this quarter. I don't think there's to be any volatility, either upside or the downside. So this will be a ago movement around this time also, as we expect to have to maintain our EBITDA at around 42% to 43% this year. This is our expectation. .

Okay. Okay, sir. And sir, about the higher employee cost, which is the government revision, the sign of contractions in the margins, is it that you are looking for?

I [indiscernible] understand your question. Please repeat your question.

Yes. About the higher employee cost, which is expected due to the government dividends in the next year to FY '27, that is going to get adjusted. So what would be the -- any other kind of impact on transaction?

I think we -- most of our employees are in nonexecutive Cataland their pay revision is being worked out right now. It is under the consideration of the ministry. But we always account for the higher wages has already been provided for the increased amount of wage is already provided for in the books of accounts. And so there's not going to be any large scale effect on that because whatever has been proposed for answer has already been accounted for from 126 itself. So there's not going to be any marginal effect on that. So when the inclusion is concerned, yes, our executive are lesser in number. It is only about -- we will be providing for that from 127 start providing for that. I think the impact would be not very current. -- we've been able to curtail our -- in fact, bring down our production cost from INR 1,000-odd per tonne in battery in Bailadila to around 800 tonnes per tonne this year. And we expect to have more such efficiency gains and we expect to reduce our cost per tonne even more. And the effect will definitely be very marginal, very many. Will be and by efficiency.

Okay. Okay. And what would be the debt level positions like you have like that pose would be for the FY '27?

As of now, there are no immediate plans on leveraging our balance sheet. 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. But if required going forward late this year, -- we may well think in terms of leveraging it only if certain big ticket acquisitions of certain big ticket -- global acquisitions 5. Otherwise, I think we are fairly comfortable in terms of addressing our CapEx deployment and current acquisition requirements. .

Okay. Okay. Sir, got it. And sir, my last question is about the environment. I like expenses are happening about the key concerns. There are a lot of projects material in your mind. So what would be the time line for the receiving any approvals. So can you share some insights on that? .

On the platform, I think we will have the well before the expansion projects actually get completed or even started. So we'll have that goes in place well in time. As a mining company is in process. asking for the enhancement of environment capacity and then as a forest year it's a continuous process. Sometimes you require it for dumping. Sometimes we require it for exploration, sometimes we require for others. It's a permit process I don't think that's very flat as of now. .

Okay. In large coal mine time lines, can you give expected ramp-up time line at annual volume target for FY '27 for coal mine? Can you please tell [indiscernible]?

Okay. So it is for about 1 million tonnes for coal. [indiscernible], I don't think we'll go little 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 add capacity, we expect to achieve in 1.5 years to 2 years maximum. And [indiscernible] it to be 2.3 million tonnes and to be 8 million tonnes. .

Due to time constraint, that was the last question of today. I now hand the conference over to management for closing comments. .

Yes. I think the Director Finance, Mr. Anurag Kapil would make the closing comments. I might have is something which we would like to add. And I request Kapil to please [indiscernible] the closing comments. .

As you have already heard that company -- NMDC is on that part of 100 million tonnes with copper planning. And in all communities, all the questions have been answered very, very satisfactorily. The performance in all the things like production, revenue from operations, profit before tax, profit after tax and sales have 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 satisfactory. .

I have 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 members 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.