In an interview to CNBC-TV18, GP Kundargi, CMD, MOIL spoke about the newly allotted land in Maharashtra. The company also received prospecting license for 11 blocks near Nagpur and Bhandara regions.
This will go in a long way for improving high grade availability in India and meeting their steel requirement.
Chairman and Managing Director
GP Kundargi, CMD of Manganese Ore India Limited ( MOIL ) is hopeful of procuring high grade manganese ore from the newly allotted lands in Maharashtra. The Maharashtra government allotted 597.44 hectares of land in Nagpur and Bhandara districts of the state. It also granted prospecting licenses for 11 blocks in those areas.
MOIL has reserved Rs 250 crore for conducting geophysical research on the same. The exact richness may not be known but it has the prospects of being a high grade ore, he adds. He told CNBC-TV18 that the production may take about 3-3.5 years to commence production from this land and will eventually boost the company's manganese output.
He sees the company’s volumes to be at 11.5-12 lakh tonnes for FY14. The production in FY13 stood at 11.4 lakh tonnes. The production from the new blocks and new sharp sinking projects will increase the total output of the company to 1.5 million tonnes (mt) by 2016-17, he says.
The company’s total debtors will be reduced to less than Rs 20 crore as Steel Authority of India Limited’s (SAIL) Chandrapur unit will repay its debt to MOIL by August 2013.
Below is the edited transcript of his interview to CNBC-TV18
Q: Could you give us some more clarity on the prospecting licence that you got in Maharashtra? What are the reserves currently? More importantly, what is the timeline by which you will secure these reserves?
A: Presently we are having 696 hectares of lease existing in Maharashtra since inception of MOIL. We are working in Maharashtra. In addition of the 597 hectares to the existing land in the adjacent areas of existing leases, good and high grade manganese deposits are available as per the old records.
These mines, these new area prospecting has worked before 1950 by some of the small producers earlier and occurrence is seen. But still, we have to do a detail prospecting by geo-physical and bore well methods. Only then we will come to know the details of the exploration. The reserve position will be very clear then.
But this is very significant for us for increasing the high grade production in MOIL. The high grade production is very limited in India. Only 15 percent of Indian reserves are higher grade. So, this will go in a long way for improving high grade availability in India and meeting their steel requirement. Projected steel requirement is around 125 million tonne over the end of 12th plan where we require about 6.8 million tonne of manganese ore.
Present production in India is only 2.6 million tonne. It is projected to go up to 4.2 million tonne by 2016-2017 as per the 12th Plan. There will be a demand gap of around 2.8 million tonnes. This will help us to improve upon and the timeline what they have got based on the infrastructure available to MOIL, we will be adhering to the time schedule of less than two years for prospecting and also converting these leases into mining leases.
Then we will apply for mining clearances and forest clearances. This is mostly 60 percent land is private and 40 percent of new area what we have got is forest. After getting the due clearances from environmental, forest, minimum we are keeping for ourselves of about three, three and half years to come into production.
Q: What is the volume guidance for MOIL for FY14 if you can throw some more light on that? Is there any inventory pileup given the weak steel demand scenario that you see?
A: As far as domestic demand, we have got sufficient domestic demand more than our production presently. MOIL is producing about 1.14 million tonne. Last year we had produced about 11.4 lakh tonne which will be in the range of 11.5 to 12 lakh tonne during FY13-14 as compared to 11.4 during FY12-13.
This is going to be there for the next one year where we have already invested in the expansion projects of under ground mine. We have taken up short sinking projects and next year we are going to commission two under ground vertical sharps which will help us to improve the production by 2015-2016.
We are deepening the existing vertical in other mines. Put together, we are expecting a production level to increase to 1.5 million tonne by the end of 12th plan i.e. 2016-2017. Our plan is to improve the production from the existing mines by the expansion to 2 million tonne by 2020.
MOIL stock price
On May 28, 2015, at 13:53 hrs MOIL was quoting at Rs 248.90, down Rs 0.95, or 0.38 percent. The 52-week high of the share was Rs 339.95 and the 52-week low was Rs 248.00.
The company's trailing 12-month (TTM) EPS was at Rs 28.27 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 8.8. The latest book value of the company is Rs 186.15 per share. At current value, the price-to-book value of the company is 1.34.
READ MORE ON GP Kundargi, MOIL, manganese oire, land allottment, maharashtra, production, manganese output
Set email alert for
ADS BY GOOGLE
video of the day
PSU stocks may give 30-40%; like mid-cap pharma: Dimensions