NMDC, Odisha Mining Corp vie for controlling stake in mega steel mill

The mill, with a projected capacity of 5-6 million tonne per annum, is likely to come up under Patna tehsil in Keonjhar

The country’s top iron ore producer National Mineral Development Corporation (NMDC) and state controlled miner Odisha Mining Corporation (OMC) are vying for 51 per cent stake in a mega steel project planned in Keonjhar district.

The steel mill, with a projected capacity of five to six million tonne per annum (mtpa), is likely to come up under Patna tehsil in Keonjhar, the site earlier identified for the 12 million tonne steel plant by ArcelorMittal. Since ArcelorMittal has already scrapped its Odisha project, the land is proposed to be used for the ultra mega steel plant in the state.

NMDC has already submitted a draft tripartite memorandum of agreement to the Odisha government. The government has conveyed its in-principle approval to form special purpose vehicle (SPV) by NMDC, OMC and the state's land acquisition agency Odisha Industrial Infrastructure Development Corporation (Idco). But progress on the project is stuck since both NMDC and OMC are vying for a controlling stake in the SPV.

“Both NMDC and OMC are insisting on holding 51 per cent equity in the SPV. The draft agreement submitted by NMDC has now gone to the state law department. The government would convene a meeting soon with the officials of NMDC and OMC to sort out the issue,” said a state government official.

Girish S N, managing director of OMC could not be reached for comments.

For ArcelorMittal’s steel project, Idco had identified 2,847.50 acres of government land and 4,905.80 acres private land in 14 villages under Patna tehsil. NMDC has evinced interest to set up ultra mega steel plants in four mineral rich states such as Odisha, Jharkhand, Chhattisgarh and Karnataka in line with the ultra mega power projects (UMPPs) of the Union power ministry.

The Union steel ministry has identified two sites in Odisha, both in iron ore rich Keonjhar district, for establishment of mega steel mills, each with capacity of 5-6 mtpa in the first phase. The ultra mega steel plants are planned to help meet the ambitious domestic steel output of 300 mtpa by 2025.

In its proposal, the steel ministry had argued that setting up these plants will bridge the widening demand-supply gap of the metal, since imports were rising. It had also proposed a Steel Finance Corporation (SFC) as a special purpose vehicle on the lines of Power Finance Corporation to finance the projects on a fast-track basis in the next few years. The SFC was to have an initial corpus of Rs 1,500 crore and would be conferred the status of a non-banking financial company.