Q&A: H S Mann, CMD, MMTC

'MMTC divestment to happen early next year'

The much-awaited disinvestment of state-run MMTC Ltd, the country’s largest trading firm in which the government holds more than 90 per cent, is expected to take place by early 2010-11, says the newly appointed chairman and managing director, H S Mann, in an interaction with Nayanima Basu. Edited excerpts:

Gold prices have shot up almost 40 per cent this year. Do you see a consequent dip in imports?
Prices are 35-40 per cent higher this year, but imports are almost at the same level. People are investing in gold from an investment point of view in the form of medallions, coins and others. This year, we plan to import 200 tonnes of gold, as compared to 185 tonnes last year.

So far, in the first six months of the current financial year, we have already imported 116 tonnes. Hence, despite a rise in prices, we expect imports to swell.

What are your plans regarding the import of agricultural products? Is it true that you are planning to cut down the import of these products this year?
We plan to import less pulses this year because of the government’s minimum support price policy, increased acreage and a good monsoon.

However, we will import more edible oil due to increased consumption. We are importing edible oil under the subsidised scheme of the government to distribute it to the states for further supply under the public distribution system. There is a huge demand for the commodity in Gujarat, Andhra Pradesh and Tamil Nadu.

The government is quite bullish on divesting its stake in MMTC in order to meet is fiscal deficit targets. When do you think the process will start and why has it got delayed?
It is not a question of delay. We are in a queue and we are anticipating the divestment to happen early next year. Three independent directors have already joined. The process is on to ensure everything is in accordance with the Sebi (Securities and Exchange Board of India) guidelines.

Are you planning to foray into any new sectors?
We are planning to foray into the solar energy sector. We plan to invest Rs 80-100 crore in Rajasthan, though we have not selected the exact location for the plant yet. It will be a 10-Mw power plant. We will be selling the power generated to state governments and public sector units like NTPC, which has already been nominated by the government. Non-conventional energy is the future, so we think the potential lies there.

The government recently issued a notice to MMTC for its failure to start work on the coal blocks allocated in Jharkhand. Have you filed a reply to the coal ministry on this issue?
We will respond soon. The coal blocks were allocated to us but there were delays by the state agencies.

We are now going for a further mining plan and will soon start looking for a joint venture partner for the project. It is on track now. It is a Naxal-affected area, so there were delays. But work has started in full force now.