RINL may pick up stake in ultra-mega steel project

At the last review meeting held here on the ultra-mega steel plant, it was decided that both NMDC and OMC would have 50% equity each

Steel PSU Rashtriya Ispat Nigam Ltd (RINL) has evinced interest to pick up equity in the ultra-mega steel project in Odisha originally proposed to be developed jointly by National Mineral Development Corporation (NMDC) and state run miner Odisha Mining Corporation (OMC).

"RINL has been roped in by the Union steel ministry to have equity participation in the ultra-mega steel plant. RINL has sent a proposal to the state government, conveying its interest to pick up stake in the project. But they have not indicated the percentage of equity," said a state official familiar with the development.

At the last review meeting held here on the ultra-mega steel plant, it was decided that both NMDC and OMC would have 50 per cent equity each. But with RINL now keen to join the project, NMDC is likely to dilute some stake.

"It can be 25 per cent equity each for NMDC and RINL. But the exact shareholding is yet to be decided," said the official.

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 scrapped its Odisha project, the land is proposed to be used for the ultra-mega steel plant.

NMDC had earlier submitted a draft tripartite memorandum of agreement to the Odisha government. The government had conveyed its in-principle approval to form special purpose vehicle (SPV) by NMDC, OMC and Odisha Industrial Infrastructure Development Corporation (Idco).

"The entry of RINL would mean some changes in the agreement terms. Now, it can be a quadripartite pact involving NMDC. RINL, Idco and OMC. Idco will not have any stake in the project and only play the role of a facilitator," the official added.

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 steel mills, each with capacity of 5-6 million tonne per annum (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 an SPV on the lines of Power Finance Corporation (PFC) to finance the projects on a fast-track basis over 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.