New Delhi: Steel Minister Beni Prasad Verma Tuesday advised NMDC to rope in Rashtriya Ispat Nigam Ltd (RINL) as a partner for its upcoming 3 million tonnes steel plant in Chhattisgarh as the state-owned iron ore miner does not have "expertise in steel making".
"In principle, I agree. They should bring RINL as a partner for Chhattisgarh (steel) plant. NMDC does not have expertise in steel making," Verma told reporters here after reviewing the half-yearly performance of NMDC.
Echoing similar words, Steel Secretary D R S Chaudhary said: "This is a decision to be taken by the company Board. The ministry would encourage it."
The Chhattisgarh steel plant is NMDC's maiden venture in the steel sector and it has been looking to expand its wings from being an iron ore producer.
"Our Board will discuss it. We can take any decision only after that," NMDC's acting Chairman C S Verma said.
Reacting to the development, a senior company official said, "this will be a set back for the company. It will take us back to the drawing board once again. The equity structure, RINL's investments, everything would have to be decided afresh."
"If it is so, why other companies are being allowed to deviate from their original mandate. SAIL has iron ore mines, RINL merged a mining company, Orissa Mineral Development Company, recently," the official said.
When asked why Steel Ministry has asked to rope in RINL and not SAIL -- the largest steelmaker in the country, the Steel Secretary said: "SAIL is chock-a-block with so many plants. RINL is the best fit. It will also help NMDC to stay focused at its core competence (iron ore mining)."
So far, NMDC has made investment commitments of about Rs 13,000 crore on the upcoming plant, which is in the advanced stages of construction.
The company has kept a target of commissioning it in 2014-15 and will make a total investments of Rs 15,525 crore on the project.
Besides, it has acquired 788 acres of private land for the plant and tied up with Chhattisgarh State Power Distribution Company Ltd for power supplies. It is also looking to set up a 250 MW captive power plant to feed the requirements of different units.
RINL, the second largest steel PSU after SAIL, has a steelmaking capacity of 3 million tonnes (MT) at Vizag. The company is in the final stages of the expanding its capacity to 6.3 MT.
First Published: Wednesday, October 24, 2012, 00:38