New Delhi: The country’s largest iron ore producer NMDC on Tuesday said it is talks with Nippon Steel for partnering it in a Rs10,000-crore project in Karnataka, and with Kobe Steel for another project in Andhra Pradesh.
“We are talking to the Japanese steel mills for a joint venture project in Karnataka (including Nippon Steel). It is not that the joint venture will be with Nippon Steel per se; it could be with any steel company,” NMDC chairman and managing director Rana Som told reporters here.
Som said the the state-owned miner had a meeting with Japanese steel firms last week for the proposed 2-million tonne per annum (mtpa) steel plant in the iron ore-rich Bellary-Hospet region of Karnataka for which it has already signed an MoU with the state.
“The Karantaka project will be a joint venture at a likely cost of Rs10,000 crore,” Som added.
Also, the company is talking to another Japanese firm Kobe Steel for a joint venture project to produce iron nuggets in Andhra Pradesh at the premises of Sponge Iron India (SIIL). NMDC-SIIL merger got regulatory approval on 1 July.
“We are also talking to Kobe for a project to produce iron nuggets. We think it will be a better business than increasing SIIL capacity,” Som said. Low grade iron ore are processed as nuggets which have about 96% iron content and is used for making steel. SIIL has an annual capacity of 60,000 tonne.
NMDC will be the second steel PSU, after SAIL, to be in talks with Japanese companies. SAIL is in talks with Posco to set up an estimated Rs15,000-crore steel plants in Jharkhand and Maharashtra.
Besides these JVs, NMDC said it will start placing equipment order for its upcoming 3-mtpa steel plant in Chhattisgarh in October. “We plan to complete construction of our integrated steel project in Chhattisgarh in the next 40 months from the date of placing orders,” Som said.
Apart from the diversification plans into the steel sector, Som said NMDC will invest Rs3,000 crore to set up a 12-mtpa pipeline between Bailadila in Chhattisgarh to Visakhapatnam in Andhra, covering 424 km. The proposed pipeline will also supply iron ore to the proposed Karnataka plant, the chaiman said.
NMDC aid it plans to place orders for the pipeline by October and commission it by 2012. “The pipeline will help us in evacuating our increasing production of iron ore to our domestic customers like RINL and Essar Steel,” he said.
Som said the company saw evacuation of iron ore coming down after the existing 274-km-long iron ore supply pipeline of Essar Steel was damaged allegedly by Maoists in 2009. The pipeline is yet to be repaired.