Narendra Singh Tomar rules out equity participation for SAIL in NMDC’s Chhattisgarh venture

New Delhi | Updated: April 4, 2015 12:52:41 AM

Steel and mines minister Narendra Singh Tomar on Friday ruled out giving SAIL...

Narendra Singh Tomar, equity participation, SAIL, NMDC, equity participation for SAIL, economy newsThe firm partnering with NMDC in the Rs 15,525 crore venture may also jointly operate the 3 mtpa greenfield facility. (PTI)

Steel and mines minister Narendra Singh Tomar on Friday ruled out giving SAIL any equity participation in state-run iron ore miner NMDC’s maiden steel venture at Nagarnar in Chhattisgarh, saying Rashtriya Ispat Nigam (RINL), another PSU, may instead be given the chance “if need arises at a later date.”

The firm partnering with NMDC in the Rs 15,525 crore venture may also jointly operate the 3 mtpa greenfield facility.

While a senior NMDC official said the company would not require any technical help to run the plant in the current phase, it may seek to rope in one partner when a plan to double the capacity is implemented later.

The minister’s view could help RINL, currently producing only long products, to diversify into flat items as well.

“Plates of SAIL are full. It is also in the midst of a huge expansion. The next phase of expansion will be even bigger.

So, I personally believe that if NMDC needs to rope in one company for running the plant in future, it must be RINL and not SAIL,” Tomar told FE, adding, however, that no decision has been taken on this regard as yet at the ministry level.

A pure-play miner NMDC had in 2009-10 conceived the steel plant with the intention of value-addition and diversifying its business to hedge itself from the vagaries of iron ore prices. Questions were raised on the decision itself in the ministry and in 2013, a global tender was also floated in vain for roping in a partner with experience and expertise in the making of steel.

Subsequently, it was decided that either SAIL or RINL may be allowed to pick up some equity for jointly running the plant along with NMDC.

There has not been any progress on this front since then. NMDC has also, meanwhile, roped in RINL’s immediate past CMD AP Choudhary as a full-time adviser with full administrative powers on technical matters for implementation of the project being built at a cost of Rs 15,525 crore.

NMDC’s technical director NK Nanda has also been lending support. NMDC’s present chairman and managing director was also heading the Burnpur unit of SAIL before being at the helm of SAIL last year.

The plant is likely to be commissioned next year.

SAIL’s plates are indeed full. The company is in the last leg of its Rs 72,000 crore expansion plan that will take its hot metal capacity to 23.1 million tonnes a year from 13.8 mtpa now. It has also readied its ‘Vision-2025’ seeking to raise the capacity further to 50.4 mtpa.

Completion of RINL’s expansion to 7.3 mtpa from 2.9 mtpa now is just round the corner. Some stake in NMDC’s Nagarnar plant will help the company to expand its product portfolio which is now confined only to long products, mainly used in construction sector to flat products that find application in areas like automobiles and white goods.

However, it also plans to further raise its capacity to 12 mtpa by 2020. Meanwhile, NMDC has also recently formed a wholly-owned subsidiary, NMDC Steel Ltd.

Surya Sarathi Ray

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