NMDC

NMDC is an Indian public sector company and is engaged in mining of iron ore, which is crucial for the steel industry and is the single largest producer of iron ore in India.  The company is considered to be one of the low-cost producers of iron ore in the world, at an average of 64% Fe, it sells one of the best grade Iron ore globally.  Top 5 iron ore producer countries are Australia, Brazil, China, India & Russia.

It also operates the only merchandised diamond mine in India at Panna, MP. The company is diversifying into steel making & coal production.

Other than iron ore, the company also has extensive experience in the exploration of a variety of minerals like copper, rock phosphate, limestone, dolomite, gypsum, bentonite, magnesite, diamond, tin, tungsten, graphite, beach sands etc.

Key growth drivers / opportunities for NMDC in the longer term are - 

• India's growth & net trade position; the interaction between scrap and hot metal and the transition towards low carbon "green" steel
• Pick up in domestic demand of infrastructure, housing, rail & road and automobile sector, and in return growth of steel industry
• Government initiatives for Self-Reliant India creating new avenues & setup of new industries leading demand for steel
• Numerous foreign companies are setting up their facilities in India on account of various Government initiatives like Make in India and Digital India
• Increase in demand for high-grade ore worldwide considering environmental concerns and NMDC’s iron ore is one of the best grades of ore in the world
• Continuous thrust by the government to use domestically manufactured iron and steel products in government procurement
• NMDC, being one of the agencies nominated to undertake exploration activities is investing to intensify exploration for mapping of minerals across the country, which could open new avenues for the company to grow

Key Risks / Threats for the company are - 

• Entry of new private payers in Iron ore & Coal Sector, under new policies of the government, will increase the competition for NMDC & reduce the demand of NMDC ore in the market
• Removal of distinction between captive and non-captive mines will allow the sale of surplus unused minerals in the market by captive miners will create pressure on the supply-demand scenario of the market
• Indian iron ore industry will continue to be noncompetitive on a global level due to higher rates of royalty and other levies such as DMF, NMET, Export duty etc. as well as significantly higher logistic costs
• Increasing regulatory pressure on environment, health & safety and sustainability 
• Disturbances due to Maoist activities in key mining region
• Huge surplus steel capacity in most regions including China will continue to exert downward pressure on steel prices and thereby iron ore prices
• Expect intense competition due to new mines coming in operation and fluctuation of demand - supply & price
• Major customers of the company (JSW & AM-NS) has acquired captive mines in mineral-rich states
• Major part of iron ore output is sold to few customers
• Exposed to the regulatory risks associated with the mining business

In my opinion, Steel is core material for any infrastructure development and hence iron ore will be required for long but the company might face tough challenge from private institutes and is possible to get dis-invested by Indian government.