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NMDC in talks with Arcelor for Karnataka steel plant

Ishita Ayan Dutt  |  Kolkata 

State-run mining major NMDC is in talks with ArcelorMittal for its proposed 10-million tonne steel plant in Karnataka. NMDC sources claimed there had been preliminary discussions with the steel major for the proposed plant. “It is at a nascent stage,” they said.

However, ArcelorMittal, which has also shown interest in setting up a six-million tonne plant in the same state, denied of any such development. A spokesman of the company said, “We have not received such a request.”

NMDC sources pointed out that all projects in Karnataka would hinge on mine allocation.

The state-owned miner is the first applicant for the Ramandurga mine in a case, which has been pending for the last 41 years in court. The Ramandurg mine has reserves of around 300 million tonnes of iron of the one-billion tonne reserves in the Bellary-Hospet region, where most of the are looking to set up plants.

NMDC is also the first company to come forward to set up a steel plant in Karnataka. NMDC’s Donimalai mines are in Karnataka, but the proposed steel plant is linked to the allocation of Ramandurg mine. NMDC has also been invited to set up a deepwater port in the state.

However, NMDC’s partnership talks for the steel plant is not exclusive to ArcelorMittal. Sources said, “We are doing a market survey right now.” The miner is in talks with Tata Steel, Japanese and Chinese players as well.

Last month, NMDC and Tata Steel signed an MoU to examine the possibility of strategic alliance for acquisition, exploration and development of mines and setting up integrated steel plants.

Tata Metaliks, promoted by Tata Steel, on the other hand has proposed a 3-5 million tonne plant in Karnataka after facing delays in land acquisition in West Bengal.

While Karnataka has emerged as an alternative destination for steel that have faced inordinate delays in the traditional mineral belt in the east, scarcity of water is driving them away.

Industry sources said investors would not invest in the state unless they are allocated iron ore mines. “It does not have coal and there is water scarcity. The only source of water is Almati,” said sources.

Karnataka has 10 per cent of the country’s haematite (high grade iron ore resources), compared to 19 per cent in Chhattisgarh, 27 per cent in Jharkhand and 33 per cent in Orissa. Ironically, Karnataka has 73 per cent of total magnetite (low grade iron ore resources), but in the ecologically and environmentally sensitive region of the Western Ghats.

Government-owned miner NMDC is in talks with ArcelorMittal for an iron ore project in Senegal, a move likely to pave the way for a likely co-operation not just in minerals, but steel as well.

NMDC sources said, some preliminary discussions had been held for NMDC’s proposed 10 million tonne steel project in Karnataka. “It is at a nascent stage,” they said. An ArcelorMittal spokesperson in India said, “We have not received such a request.”

ArcelorMittal has already evinced interest in setting up a six million tonne plant in Karnataka. However, NMDC pointed out that all projects in Karnataka would hinge on mine allocation.

The state-owned miner is the first applicant for the Ramandurga mine, which has been pending for the last 41 years, and is in court. Ramandurga has reserves of around 300 million tonnes of the one billion tonne reserves in the Bellary-Hospet region, where most of the are looking to set up plants.

NMDC happens to be one of the first companies to come forward in setting up a steel plant in Karnataka. NMDC’s Donimalai mines are in Karnataka, but the proposed steel plant is linked to the allocation of Ramandurga. NMDC has also been invited to set up a deepwater port in the state.

However, NMDC’s partnership talks for the steel plant is not exclusive to ArcelorMittal. Sources said, “We are doing a market survey right now.” The miner is in talks with Tata Steel, Japanese and Chinese players.

Last month, NMDC and Tata Steel signed a memorandum of understanding to examine the possibility of strategic alliance for acquisition, exploration and development of mines and setting up integrated steel plants.

Tata Metaliks—promoted by Tata Steel—on the other hand has proposed a 3-5 million tonne plant in Karnataka after facing delays in land acquisition in West Bengal.

While Karnataka has emerged as an alternative destination for steel companies that have faced inordinate delays in the traditional mineral belt in the east, lacks adequate water to cater to all the proposed projects and coal.

Industry sources said, investors would not put in money in the state unless allocated iron ore mines. “It does not have coal and there is water scarcity. The only source of water is Almati,” said sources.

Karnataka has 10 per cent of the country’s haematite (high grade) iron ore resources, compared to 19 per cent in Chhattisgarh, 27 per cent in Jharkhand and 33 per cent in Orissa. Ironically, Karnataka has 73 per cent of total magnetite (low grade) iron ore resources, but in the ecologically and environmentally sensitive region of the Western Ghats.

State-run mining major NMDC is in talks with ArcelorMittal for an iron ore project in Senegal, a move that is likely to pave ways for likely co-operation not just in minerals, but steel as well.

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First Published: Thu, February 18 2010. 00:38 IST
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