Business Standard

NMDC plans special purpose vehicles to set up steel plants

- T E NARASIMHAN

Public sector mining major NMDC will have Special Purpose Vehicles (SPVs) with the government­s of Jharkhand and Karnataka to set up steel factories.

Its annual report said so. Company officials were not available for comment.

Its SPV in Jharkhand has already selected the site and applied for allocation of land, water and power. In Karnataka, NMDC says, it has acquired around 2,800 acres.

NMDC has also sought (from the Union government) iron ore allocation in Jharkhand and Karnataka for this purpose.

After land acquisitio­n, water and power allocation and iron ore linkage, the SPV will invite a strategic partner to develop and construct the steel plant.

As part of a value addition project, NMDC is already setting up a pelletisat­ion unit and an integrated steel plant of three million tonnes annual capacity (mtpa) in Chhattisga­rh. This plant is close to completion.

On the mining side, to meet steel sector demand, NMDC plans to augment its production capacity of iron ore to 67 mtpa, from 43 mtpa now. A joint venture (JV) company with CMDC is also expected to start production in the near future. The JV is planning to develop 15 mtpa in mines.

The backdrop is the Union government thrust on more spending for infrastruc­ture, auguring well for the steel industry and, thereby, the iron ore sector. Persistent demand should help NMDC improve its sales volume and operating earnings margin.

Coupled with growing urbanisati­on, rising income levels of the burgeoning middle class, state initiative­s such as Make-in-India, freight corridors, 100 smart cities, rural electrific­ation and housing for all by 2022, NMDC sees a bright future for the mining and steel industry, says the company.

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