Suspected Naxal attack hits NMDC production

KOLKATA: A suspected Naxalite attack on NMDC's Bacheli mine in Bailadila region of Chhattisgarh during the early hours of Wednesday has disrupted production at one of the country's most lucrative iron ore mines. The attack highlights the threat faced by NMDC's operations located deep inside the forests in strife-torn Dantewada district.

Officials at NMDC headquarters in Hyderabad said production has taken a hit, though despatches of ore have not been affected due to the attack which burnt down some 150 metres of a conveyor belt used to transport ore at the mine complex which produces six million tonnes of ore every year.

"Despite the attack we are carrying on despatches from our stockpile. However, production has been affected. It will take a few days to resume operations," a top NMDC official said.

Since NMDC supplies ore to a large number of domestic steel makers, analysts pointed out the latest attack could have a serious impact on the iron ore sector and domestic steel industry. "This could be a severe blow for domestic steel industry since steelmakers are already reeling under ore shortage due to the mining crisis in Karnataka where few mines have resumed production, mining ban in Goa and mines that are struggling in Odisha," Anjani Agrawal, Partner (Metals & Mining) at Ernst& Young said.

According to agency reports, a group of ultras stormed into the Bacheli mines where NMDC operates mine No. 5 and mine no. 10-11. An NMDC official said Wednesday's attack was restricted to mine no. 5, where run-of-mine (ROM) operations is likely to remain unaffected and production of ore will not be hit. However, the attack has affected operations at the screening plant near mine no. 5 where iron ore lumps and fines are separated.

NMDC shares plunged 4% at the BSE on Wednesday as news of the attack created concern among investors. NMDC closed at Rs 122.50, down Rs 1.40, or 1.13% on the BSE. In 2010, Essar Steel's 267-km slurry pipleine between Kirandul andVizag slurry in Bailadila area was destroyed in a similar terror attack.