Odisha Mining Corp wants 51% stake in ultra mega steel mill

The UMSP would be developed by a SPV where OMC, NMDC and Idco would be the equity contributors

State controlled miner Odisha Mining Corporation (OMC) is keen to have 51 per cent stake in the ultra mega steel project (UMSP) proposed in the state in joint venture with country’s top iron ore producer National Mineral Development Corporation (NMDC).

Apart from OMC and NMDC, the special purpose vehicle (SPV) to implement the project will have state’s land acquisition agency, Odisha Industrial Infrastructure Development Corporation (Idco), as thir partner.

“At a recent meeting, we have communicated to the state government that we are keen on 51 per cent stake in the ultra mega steel project. Now, the government has to take a call. Being a JV with a prestigious central PSU, this is an important project for us,” said Girish S N, managing director of OMC.

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 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 SPV by NMDC, OMC and Idco. But progress on the project is stuck since both NMDC and OMC are vying for a controlling stake in the SPV.

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, which 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.