NMDC & Tata Steel form joint venture for steel plants

NMDC & Tata Steel form joint venture for steel plants

 
Tata Steel Managing Director H M Nerurkar (left) & NMDC CMD Rana Som exchanging an MoU in Kolkata on Friday. PTI Briefing reporters, NMDC Managing Director Rana Som, said a joint working group has been set up to decide within a couple of months on the details of areas of joint business and mining exploration. The report is expected within two months.

On details of equity structure of new joint venture, Som said since there could be one or more than one joint ventures with Tata Steel, total investment and pattern of equity structure would be worked out once the group submits its report.

Equal stakes

It is likely that the partners would have equal stakes in those companies. A joint steering group is also to be formed to monitor the progress and operation of the joint venture.

“Both are cash-rich companies and the joint venture will result in unprecedented synergy,” he pointed out. “We’re setting up a demonstration plant in Karanataka, showcasing new mining technology developed at our R & D centre.The joint venture can utilise it for new areas,” he added.

Asked whether the proposed joint venture would consider setting up an integrated steel plant in Karnataka which is a virgin territory,Tata Steel Managing Director H M Nerurkar said “We can think of it.” Som, however, sounded extremely positive on the idea.

Knowledge sharing

While Tata Steel will bring in its expertise to produce steel, NMDC would contribute by way of sharing knowledge in use of low-grade iron ores, Nerurkar said.  Tata Steel has major plans of expansion within the country and has been looking at enhancing its iron ore resources and developing technology for lower grades of iron ore in India. NMDC plans to look beyond its iron ore business and establish a presence in steel making to add value to its mining operations.

NMDC, largest iron ore producer in Asia and 8th largest in the world, is diversifying into manufacturing of steel and pellets.

The central PSU which is setting up an integrated steel plant in Chattisgarh, plans to act on a three-pronged strategy by entering into wind and solar energy besides fertiliser.

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