New Delhi: The government has approved the merger of Sponge Iron India Limited (SIIL) with country’s third most valued company National Mineral Development Corporation (NMDC).
The proposal for merger of the two public sector enterprises under the Ministry of Steel was approved by the Union Cabinet at its meeting in New Delhi.
“The merger would be carried out within six months through acquisition of SIIL shares by NMDC in public interest,” Finance Minister P Chidambaram told reporters here.
He said that the merger will ensure in-house supply of desired quality and quantity of iron ore to SIIL’s sponge iron plant at Paloncha in Khamman district of Andhra Pradesh.
Besides, it will also pave the way for implementation of the proposed sponge iron plant expansion at Paloncha by utilising surplus land and manpower of SIIL and financial resources available with NMDC.
SIIL, which has an installed capacity to manufacture 60,000 tons of sponge iron per annum, has been facing acute raw material shortage for a couple of years.
“This problem would be permanently solved once the company merges with NMDC,” SIIL Chairman and Manging Director V K Uppal said in his message on the company’s website.
The merger of SIIL was recommended by the expert group constituted by Steel Ministry under the chairmanship of former steel secretary B L Das.
Earlier, the government had proposed the company’s merger with Vizag Steel Plant, but it did not materialise.