KIOCL is a government-owned iron ore pellet maker that lost its captive mine two decades ago and has been running ever since on ore bought from others - a manufacturer without its own raw material. It was born in 1976 as Kudremukh Iron Ore Company, a 100% export-oriented unit mining the Kudremukh hills, until a Supreme Court order shut the mine in 2006 and forced a reinvention into a technology-driven pelletiser, mineral explorer and project engineer. The recurring pattern is a company that turns constraints into capabilities: when it lost its ore, it built expertise in handling everyone else’s; when its blast furnace became uneconomic, it mothballed it and is now rebuilding around it with a coke oven and a pipe plant, funded entirely from its own cash reserves with zero debt. # Business segments Two engines at different stages - a pellet-making cash generator that runs on bought ore, and a captive mine under construction that promises to feed it - plus a small exploration-services practice that grew out of the company’s geological DNA. ## 1. Iron oxide pellets: a manufacturer that buys all its raw material **The company turns iron ore fines into blast-furnace-grade pellets at a 3.5-million-tonne-per-year coastal plant, but every tonne of ore must be purchased from third parties because it has no operating mine of its own.** - **Waste-to-value proposition** - iron ore fines are a by-product of mining that would otherwise be discarded; the pellet plant binds them into hard, furnace-ready spheres that steelmakers use as feed material, which is how the company earns its per-tonne selling price. - **Shore-based logistics, for better and worse** - the plant sits next to a dedicated berth at Mangalore Port with its own mechanical ship loader, giving it a natural export advantage, but it is far from both the ore sources and domestic steel customers, so inbound and outbound freight costs are persistently high. - **Dependent on a sister PSU for ore** - with no captive mine since 2006, the company relies on a long-term supply agreement with NMDC for iron ore fines from Bailadila in Chhattisgarh, moved by rail to the coast and then by sea to Mangalore, a route that keeps raw-material costs elevated. - **A tolling arrangement that fills the plant** - under a job-work contract with NMDC, the company converts NMDC’s iron ore fines into pellets for a conversion fee; the deal was recently expanded from 1 million to 3 million tonnes, providing volume visibility even though it caps margin upside. - **Export exposure has shrunk dramatically** - China was historically the dominant buyer, but its steel mills have shifted toward sinter over imported pellets, and Indian pellet exports fell 39% in FY25; KIOCL’s own export volumes collapsed from 1.59 million tonnes to just 0.155 million tonnes in a single year, forcing a pivot toward domestic customers and the addition of seven new buyers. ## 2. Devadari iron ore mine: the captive supply that does not yet exist **A 388-hectare mining lease in Karnataka’s Ballari district, fully permitted and paid for, that will eventually deliver 2 million tonnes per year of iron ore to the pellet plant - but it remains unopened pending a forest-land agreement.** - **Fifty-year lease, already executed** - the mining lease deed was signed and registered in January 2023 after the company paid ₹329.17 crores in stamp duty and fees, and all statutory approvals - environmental clearance, forest diversion Stage-I and Stage-II, and pollution-board consent - are in hand. - **Phase-I carries an ₹882-crore price tag** - the approved project covers a 2-million-tonne-per-annum mine plus a beneficiation plant of matching capacity, with road transport permitted until a conveyor system is commissioned in 2026. - **One legal hurdle holds everything up** - the Forest Lease Agreement with the Karnataka Forest Department has not been signed, and the company has gone to the High Court of Karnataka seeking a direction to execute it, because the delay is tied to unresolved issues around the old Kudremukh mine. ## 3. Mineral exploration services: a geologist-for-hire built on the company’s mining roots **KIOCL operates as a government-notified exploration agency, earning fees by finding and quantifying mineral deposits for state governments, public-sector companies and private miners across India.** - **Thirty-six projects and counting** - since 2015, the company has handled 36 exploration assignments, completing 29 and establishing 2,743.74 million tonnes of mineral resources spanning iron ore, limestone and low-grade nickel, with 21 of those blocks now moving through the auction process. - **Moving into critical and precious minerals** - current projects include copper, gold, graphite and rare-earth-element exploration in Karnataka and Tamil Nadu, including a 50-square-kilometre gold block in Mandya district, supported by an in-house lab equipped with advanced spectrometry and microwave digestion kit. - **Revenue is fee-based and lumpy** - the division earns income from exploration contracts and also from plant-construction jobs like the chrome-ore beneficiation plant it built for Odisha Mining Corporation, which alone brought in ₹56 crores. # Group structure and partners **KIOCL is a standalone central public-sector enterprise with no subsidiaries or joint ventures, owned by the Government of India through the Ministry of Steel and listed on three Indian stock exchanges.** - The President of India is the promoter, acting through the Ministry of Steel, and the company carries the Schedule ‘A’ Mini-Ratna designation. - It operates two physical units - the pellet plant and the suspended blast furnace, both in Mangaluru - and runs mineral exploration as a direct service line, with liaison offices in nine locations including Bengaluru, New Delhi and Visakhapatnam. - A once-contemplated joint venture with RINL for a Vizag pellet plant was reported at a halted stage, and the company has publicly denied any active merger discussions with NMDC. - In August 2025, KIOCL exited the 100% Export Oriented Unit scheme, ending a four-decade-old customs-and-export-obligation framework that had governed it since 1982.