NMDC to Begin Thermal Coal Output in October Quarter as Iron Ore Giant Diversifies Into Fuel
India's largest iron ore miner targets 1 million tonnes of thermal coal sales by end-FY27, with a larger coking coal project to follow.
NMDC, India's largest iron ore miner by volume, will start commercial thermal coal production in the October-December 2026 quarter and aims to sell up to 1 million tonne of dry fuel before the end of FY27, the company's chairman said on Saturday (2026-09-05). The announcement provides the first concrete production timeline for the Tokisud North mine in Jharkhand, which NMDC won through a coal ministry auction and holds reserves of 52 million tonnes against an annual peak rated capacity of 2.3 million tonnes.3
For a company that recorded 53 million tonnes of iron ore output in FY26, up 20% from 44 million tonnes in FY25, a 1 million tonne coal target is a modest opening position. But the direction is clear. NMDC is using the Tokisud North ramp-up as an entry point into broader mineral diversification, one that includes a coking coal component it intends to bring into production by FY28.3
The coking coal side is the larger play. NMDC's Rohne block, also in Jharkhand and also won at government auction, holds 191 million tonnes of reserves with a peak annual capacity of 8 million tonnes. The company has set a FY27 target to develop that mine, with first production pencilled for FY28. Eight million tonnes of domestic hard coking coal would ease supply pressure for Indian steelmakers currently dependent on seaborne imports.3
India's appetite for domestic coal supply has been growing. Government data showed coal imports fell nearly 13% year-on-year in April 2026 (the month of April 2026), with volumes dropping to 21.1 million tonnes as power plants began substituting overseas supply with home-produced fuel. NMDC's chairman framed the thermal coal push in similar terms, saying the company aims to support growing domestic industries with their mineral needs.1,3
Coal India's CMD, B. Sairam, told Mint in August 2026 (2026-08-25) that FY27 is seeing "extremely high" power demand and that coal will remain central to India's energy mix until 2047, even as the country pursues renewable expansion. State-owned entities are being pulled in the same direction by the same demand signal.2
Still, NMDC is entering thermal coal as a price-taker into a market with its own dynamics. Newcastle thermal coal physical price stood at $138.25 per tonne in Saturday's (2026-09-05) session. Displacing seaborne imports requires domestic producers to deliver competitively on logistics and quality, not just nameplate capacity. Jharkhand mines face rail evacuation constraints that have historically widened the gap between mine-gate and power-plant-gate prices.3
The 1 million tonne FY27 target should be read against Tokisud North's 2.3 million tonne peak capacity. NMDC is guiding to roughly 43% utilisation in the first commercial year, which fits a mine working through ramp-up logistics rather than one running at full tilt. Whether it reaches even that level will depend on rail allocation and offtake arrangements that have not been publicly disclosed.3
On iron ore, NMDC is not slowing down. The company is tracking toward a 100 million tonne production target by 2030 and grew output 20% in FY26 alone. The coal push sits alongside that trajectory rather than replacing it — the chairman described the dual strategy as serving India's industrial base more broadly.3
The coking coal timeline carries longer-dated but larger implications. India has no meaningful domestic hard coking coal supply chain. If Rohne reaches its 8 million tonne peak capacity, it would represent a new source of steelmaking coal that could alter import patterns from exporters who currently supply the bulk of Indian demand. FY28 is still eighteen months away, and development-stage timelines in Indian mining have a history of slipping. Buyers watching the seaborne coking coal trade will want to see Rohne's rail permits and environmental clearances before pricing in any meaningful volume displacement.3