State-owned mining giant NMDC has earmarked Rs 755 crore for capacity expansion in Karnataka, targeting an increase in mining output at its Donimalai operations to 17 million tonnes per annum. The announcement was made on 22 June 2026, with the company outlining plans to boost production from current levels to meet growing demand for iron ore.
Investment Details and Capacity Targets
The Rs 755 crore investment will focus on enhancing infrastructure and equipment at the Donimalai mine, located in the Ballari district of Karnataka. NMDC aims to raise the mine's capacity from its existing 12 million tonnes to 17 million tonnes, a 42% increase. This expansion is part of NMDC's broader strategy to ramp up domestic iron ore production and reduce India's reliance on imports.
According to NMDC officials, the project will involve installation of new crushing and screening plants, conveyor systems, and beneficiation facilities. The expansion is expected to be completed over the next three years, with phased commissioning starting in 2027.
Impact on Karnataka's Mining Sector
Karnataka is a key iron ore producing state, and NMDC's Donimalai mine is one of its largest operations. The capacity expansion is expected to create additional employment opportunities and boost local economic activity. The company has also committed to environmental management plans, including afforestation and dust control measures, to mitigate mining impacts.
NMDC's move aligns with the central government's push to enhance mineral production under the National Mineral Policy. The company has been investing in modernization and expansion across its mines in Chhattisgarh, Karnataka, and other states.
Financial and Market Context
The investment comes at a time when global iron ore prices have stabilized after volatility in recent years. NMDC, which reported a net profit of Rs 4,200 crore in the last fiscal year, is leveraging its strong cash reserves to fund expansion. The company expects the Donimalai expansion to contribute significantly to its revenue once fully operational.
Industry analysts note that the increased capacity will help NMDC meet the rising demand from domestic steel producers, particularly as India aims to double steel production capacity by 2030. The expansion is also expected to improve NMDC's market share in Karnataka, where it competes with other miners like Vedanta and private operators.
