New Delhi: State-owned NMDC Limited is set to begin commercial production of thermal coal from its Tokisud North mine in Jharkhand during the October-December quarter of FY27, marking a significant step in the company’s attempt to diversify beyond iron ore.
NMDC Chairman and Managing Director (CMD) Amitava Mukherjee said the company intends to sell up to one million tonnes (MT) of thermal coal during the current financial year. The company has reached the coal seam at Tokisud North and expects production to begin in the next quarter.
Follow The PSUWatch Channel on WhatsApp
“We have reached the coal seam, and production will start by next quarter,” Mukherjee said in an interview.
Thermal coal is primarily used for electricity generation. Its commercial production will give NMDC a second major mineral product, although iron ore will continue to dominate its operations and revenue in the near term.
“Right now, we are 99.9 percent an iron ore company. We aim to help the growing industries in the country with the maximum of their mineral needs,” Mukherjee said.
NMDC secured the Tokisud North thermal coal mine and the Rohne coking coal block in Jharkhand through auctions conducted by the Ministry of Coal.
The Tokisud North mine has estimated reserves of 52 MT and an annual peak-rated capacity of 2.3 MT. NMDC’s FY27 sales target of up to 1 MT, therefore, represents an initial ramp-up rather than full utilisation of the mine’s rated capacity.
The company has not disclosed the prospective buyers, expected coal grade, pricing mechanism or likely revenue contribution from Tokisud during FY27.
The mine was described as operationalised during FY26, but the planned October-December start will mark the beginning of commercial production and sales. The distinction is important because mine opening, removal of overburden and reaching the coal seam precede sustained commercial extraction.
NMDC also plans to begin developing the Rohne coking coal block during FY27, with production targeted as early as FY28.
The Rohne block contains estimated reserves of 191 MT and has a peak-rated production capacity of 8 MT annually. Coking coal is a critical input in blast-furnace steelmaking, and India remains heavily dependent on imports to meet domestic demand.
“So this year, NMDC will have coal to offer apart from iron ore, and going forward, maybe from next fiscal, coking coal too,” Mukherjee said.
The proposed FY28 start remains subject to mine development, regulatory approvals, infrastructure readiness and the company’s ability to complete preparatory work on schedule.
Mukherjee said NMDC has prepared a diversification roadmap extending to 2030 as it seeks to transform itself from a predominantly iron ore producer into a broader mineral-mining company.
The company will examine opportunities to acquire and develop additional mineral assets in India and overseas. However, Mukherjee did not identify the other minerals being considered or provide details about the investment required for the diversification programme.
NMDC aims to generate at least 20 percent of its revenue from minerals other than iron ore by 2030. Achieving that target would require a substantial change in its business mix, given Mukherjee’s assertion that iron ore currently accounts for 99.9 percent of its operations.
The Tokisud and Rohne projects will provide the first test of whether NMDC can develop new mineral businesses at a scale large enough to meaningfully reduce its dependence on iron ore.
Follow PSU Watch on LinkedIN
Diversification is being pursued alongside an aggressive expansion of NMDC’s core business. The company has set a target of reaching 100 MT of annual iron ore production capacity by 2030.
NMDC produced a record 53.15 MT of iron ore in FY26, up about 21 percent from the previous year, while sales rose 13 percent to 50.23 MT. The company became the first Indian miner to cross 50 MT of annual iron ore production, according to a Ministry of Steel statement.
Revenue increased about 33 percent to a record Rs 31,554 crore in FY26 from Rs 23,668 crore in FY25.
The company accounts for about 20 percent of India’s iron ore requirement and operates mechanised mining complexes in the Bailadila region of Chhattisgarh and the Donimalai region of Karnataka.
While coal production will broaden NMDC’s portfolio, the volumes expected in FY27 remain modest compared with its iron ore operations. The more consequential shift will depend on how quickly Tokisud approaches its rated capacity, whether Rohne begins production on schedule and what additional mineral assets the company secures before 2030.
(PSU Watch is India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy. 👉 Click to join our channel now: PSUWatch WhatsApp Channel. Prefer LinkedIn? Follow PSU Watch on LinkedIN. Click to stay connected on Twitter here and stay updated)