NMDC to spend 30 bln rupees on iron ore development

KOLKATA (Reuters) - India's leading state-run miner, National Mineral Development Corp, plans to invest 30 billion rupees over 30 months to add value to iron ores mined, a top official said on Thursday.

It plans to set up two units of 0.5 million tonnes each in Chhattisgarh and Karnataka to make pig iron from iron ore slime, a waste material generated while extracting iron from ore, chairman and managing director Rana Som said in a business meet.

The firm also has plans to invest 500 million rupees to buy drilling machines to foray into exploration of iron ore reserves in India, he said.

"Funds from internal accruals will be used for the investments," he said.

Annual iron ore production in India is estimated at 170 million tonnes, and its total iron ore reserves are seen at 25 billion tonnes.

Som said the firm, scouting for iron ore resources overseas, is examining opportunities in Canada and Africa.

NMDC, which accounts for about 15 percent of iron ore production in India, operates three mines -- two in Chhattisgarh and one in the southern state of Karnataka.

It has applied for eight mining leases in Karnataka and another one in Orissa.

NMDC has taken eight prospecting leases for diamonds in Andhra Pradesh and prospecting work on a gold mine in Tanzania was underway.