NMDC seeks foreign partners for Karnataka steel project

NMDC, the country’s largest iron ore mining firm, is seeking foreign partners for its proposed steel plant in Karnataka, even as the project’s feasibility report is yet to be written.

NMDC is planning to set up a 2-million tonne (mtpa) unit, for which it wants 2,500 acres from the state government. The ‘Techno Economic Feasibility Report’ is yet to be made. The company is in the process of floating tenders for it and has applied for the land.

“We plan to undertake this (Karnataka) project along with one other strategic partner. We are still exploring various possibilities in this front … The talks are in initial stages with various parties. We may expect something concrete to emerge shortly,” Swaminathan Thiagarajan, Finance Director, NMDC, told Business Standard.

However, the company’s other steel project, at Jagdalpur in Chhattisgarh, having a capacity of 3 mtpa and involving a capital outlay of about '15,600 crores, is “progressing as per schedule”. The project has been divided into eight packages and tenders have been opened for two of these and are under scrutiny, he said.

For both units, NMDC is planning to source coking coal from abroad. “We are examining various options for the sourcing. We are exploring a few options for coal mines in Russia. The financials and logistics are being evaluated by our internal teams. The developments are in very preliminary stage,” he said.

The company has also entered into strategic alliances with Kopano Ke Matla Investment Company, South Africa, and Tata Steel over exploration and exploitation of mineral resources for its iron ore business. It is also exploring for more opportunities in Australia and Africa.

“Within the country, we have Deposit 11B coming up during the next financial year with a capacity of seven million tonnes, while the Kumaraswamy mine will be operational by 2013-14, adding another seven mt. Our partnership in NMDC CMDC Ltd will add another five million tonnes to our production in the coming four-five years,” Thiagarajan added.

NMDC produced 23.8 mt of iron ore in 2009-10. In the present year, it is planning to ramp it up to 26 mt to meet its dispatch targets.