NMDC has signed a long-term Gas Sale Agreement with GAIL Gas to supply natural gas to its pellet plant at Nagarnar in Chhattisgarh, with a new 130-km pipeline planned from Damanjodi in Odisha. The project will allow the state-owned miner to replace furnace oil at the facility and is expected to reduce emissions and improve operating efficiency.
The pipeline will extend the existing gas network running from Dhamra Port to Damanjodi, which currently supplies natural gas to National Aluminium Company Ltd’s plant, according to details reported by Moneycontrol. GAIL Gas will develop the pipeline connectivity and establish a gas receiving and metering station at Nagarnar under the agreement.
The planned link will connect the Jagdalpur region to the expanding natural gas network, creating fuel infrastructure for NMDC’s 2.0 million-tonne-per-annum iron ore pellet plant. The company said the switch from furnace oil to natural gas is expected to improve process efficiency, product quality and long-term cost competitiveness in addition to reducing emissions.
NMDC Chairman and Managing Director Amitava Mukherjee described the agreement as a step towards cleaner operations at Nagarnar. “By transitioning to natural gas at Nagarnar, we aim to substantially reduce emissions while strengthening the efficiency and competitiveness of our pellet operations,” he said, adding that the move reflected the company’s effort to combine environmental responsibility with industrial growth.
The arrangement places the pellet plant within a broader infrastructure chain linking gas transmission, industrial production and mineral processing. The new pipeline will need to be supported by a receiving and metering facility at the plant, making the project dependent not only on the line itself but also on the associated gas-handling infrastructure.
NMDC’s Nagarnar facility is part of the company’s iron ore value chain, and the proposed fuel change is aimed at improving the plant’s operating conditions while reducing dependence on furnace oil. The supplied report did not specify the project’s construction schedule, capital cost, gas volume, tariff structure or the expected emissions reduction.
The agreement comes as NMDC continues to assess opportunities in critical minerals and overseas mineral assets. Moneycontrol, with inputs from Reuters, reported that the company has put its planned entry into nickel on hold partly because of concerns about global oversupply from Indonesia, which accounts for more than 60% of global nickel output. India classified nickel as a critical mineral in 2023 and relies primarily on imports to meet demand.
For the Nagarnar project, the next stated steps are the development of the 130-km pipeline and the gas receiving and metering station by GAIL Gas. The supplied information does not provide a commissioning date for either facility.
