Title - NMDC climbed up on signing MoU with Railway

NMDC rose after the steel ministry said the company has signed a memorandum of understanding with Indian Railways.

The Ministry of Steel after trading hours on Friday, 21 December 20012, said NMDC has signed a Memorandum of Understanding (MoU) with Indian Railways. As per the provisions of the MoU, the 150 km Jagdalpur-Kirandul section of the Kottavalsa-Kirandul railway line of the East Coast Railway will be doubled to augment the evacuation capacity of NMDC to meet the increased demand for iron ore of the Indian steel industry. The project will be implemented by Indian Railways at a cost Rs 826 crore and same will be funded by NMDC with provisions for suitable returns through freight rebate, the Ministry of Steel said in a statement. The Railways will additionally make necessary investment in wagons, locomotives, other maintenance facilities and deployment of staff. The new line is likely to create an additional traffic of upto 12 million tonne per annum (MTPA) in a phased manner, the steel ministry said.

The Government of India (GoI) sold 39.64 crore shares, constituting 10% stake, in iron-ore miner NMDC through Offer for Sale (OFS) route via the stock exchanges mechanism on 12 December 2012. The Government of India (GoI) currently holds 80% stake in NMDC.

State-run NMDC is India's single largest iron ore producer and exporter, presently producing about 30 million tonnes of iron ore from 3 fully mechanized mines in Chhattisgarh and Karnataka.  NMDC's net profit fell 14.5% to Rs 1678.62 crore on 14.7% decline in net sales to Rs 2611.84 crore in Q2 September 2012 over Q2 September 2011.