MSPL to produce 7 mn metric tonne iron by 2008

New Delhi, Nov 25: MSPL Ltd, country's leading iron ore mining, processing and exporting firm, has said it will produce seven million metric tonnes of iron ore which will scale up its topline to Rs 2,000 crore by this fiscal-end on strong iron ore demands from China.

Surging output in China which imports almost half of global iron ore exports has meant that ''compared to 4.88 million metric tonnes of iron ore production to March 31 this year, we will produce seven million metric tonnes by March 2008,'' said company Chairman and Managing Director N K Baldota.

He added that the topline will touch Rs 2,000 crore by March next year, as compared to Rs 1,200 crore last fiscal.

Iron ore demand from China, which produces a third of the steel in the world, has sent contract prices up threefold in the past five years. Sales will continue to grow at 10 per cent a year for at least the next three years, helping raise prices, predicts Goldman Sachs, whose base forecast for next year is a 30 per cent gain. This has meant rates for individual shipments of the commodity from India have almost doubled over the past five months.

MSPL exports 95 per cent of its production to China and only the remaining five per cent is meant for domestic consumption. The company exports the iron ore to China on dollar terms.

However, a rising value of the rupee, which has risen by 6-7 per cent in the past few months, has not meant erosion in terms of profit for the company. ''If rupee has appreciated so has the value of iron-ore. The value of iron ore has increased by as much as 22-30 per cent in near term,'' said Mr Baldota.

Credit Suisse in a report predicts global steel output to rise about 17 per cent annually, which will support an increase of 35 per cent next year.

Mr Baldota said the company is now keenly looking at mines outside the country to cater to the huge demand. ''We are looking at acquiring mines in Australia and Brazil and due diligence is on,'' he said.

At present, the company has Vyasanakere Iron Ore Mine, an open cast iron ore mine, in the Bellary-Hospet region of Karnataka.

Mr Baldota said the company was also looking at additional mines in Karnataka.

UNI