KIOCL finds JV partner for its Bellary steel plant

KIOCL Ltd, a Union steel ministry undertaking, has selected a joint venture (JV) partner for setting up an integrated steel unit with a capacity of five million tonnes per annum (mtpa). The plant will see an investment of Rs 9,000 crore in Bellary district of North Karnataka.

KIOCL has selected URSIPL, a concern of Bangalore-based  United Telecom Ltd, to form a 26:74 per cent JV company.

“We are in the process of drafting the JV agreement,” K Ranganath, chairman and managing director, KIOCL, told Business Standard.

He said as part of its 26 per cent equity in the new company, KIOCL will have to invest Rs 2,340 crore and the company plans to fund this from internal accrual. It has a cash reserve of Rs 1,200 crore. The JV company is likely to be formed by November this year, said Ranganath.

He said URSIPL will be responsible for acquiring land. The state government has given in-principle approval for allotment in Bellary district. It will also be URSIPL’s responsibility to bring the technical knowhow for running the steel plant. KIOCL will provide expertise for mining iron ore, once the captive mines are allotted. URSIPL will also take care of marketing the finished products.