Global giants queueing up to partner NMDC in steel venture

Global steel giants like Nippon Steel & Sumitomo Metal (NSSM), US Steel, ArcelorMittal and Posco are in talks with state-run NMDC for partnering with the PSU for its upcoming 3 million tonne steel plant at Nagarnar in Chhattisgarh.

The firms are in the midst of pre-partnership discussions with the miner and one of them is expected to pick up 49 per cent equity in the project and invest about Rs 5,000-6,000 crore within April.

A top official of the steel ministry told The Indian Express that NMDC had in February floated a Expression of Interest (EoI) seeking a strategic partner for developing its upcoming plant at Nagarnar in Chhattisgarh’s Bastar district to be built at an estimated expenditure of Rs 15,525 crore.

The project cost is envisaged to be financed in the debt-equity ratio of 1:4. According to the EoI the partner would have to pick up equity of 49 per cent and would also help in operating the plant. While NMDC would ensure supply iron ore, the partner is expected to supply other critical inputs like coking coal or low-ash coal.

Ever since the EoI was floated, Japanese giant NSSM is keen to partner with NMDC for the Nagarnar project.

It has the requisite technological strength to roll out the envisaged products like Cold-Rolled Grain Oriented silicon steel (CRGO) and Cold Rolled Non Oriented (CRNO) products which are capital intensive. Another key contender is US Steel.

A major reason why foreign firms are keen to form a JV is that NMDC has assured iron ore security to meet the production needs. All it needs is that the JV partner should secure steady supplies of coking and low ash coal.

Not to be left behind, the world’s biggest steel producer ArcelorMittal, which is looking at a possible partnership with NMDC as to set its footprint in the country, as is Posco that is struggling to launch greenfield projects in Orissa.

[Source — Indian Express]

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