A high-powered committee has suggested against the merger of ailing mining public sector unit Kudremukh Iron Ore with the country's largest iron ore producer NMDC as a turnaround measure for the PSU's revival.
The Steel Ministry-appointed committee, led by former Kudremukh Iron Ore (KIOCL) CMD P Ganesan, has in fact rejected the option of merger of four sick PSUs — Minerals Sales Trading Corp, Ferro Scrap Nigam, Hindustan Steelworks Construction and KIOCL — under the Ministry as a turnaround measure.
"The Committee is not in favour of any major overhaul for restructuring of Minerals Sales Trading Corporation (MSTC), Ferro Scrap Nigam Ltd (FSNL), Hindustan Steelworks Construction Ltd (HSCL) and KIOCL. Instead it has come out with individual suggestions to strengthen their operations," Steel Secretary P K Rastogi told PTI.
The committee has suggested acquisition of iron ore mines by KIOCL besides taking up forward linkage in value-added products for pig iron plant, he said.
"For MSTC, it has suggested restricting to its core trading and other activities and not financing activities," Rastogi said, adding that the committee is of the view that HSCL should participate in backward integration in the form of pelletising mineral ore and help set up sintering ore facilities.
For FSNL, a wholly-owned subsidiary of MSTC, the panel has suggested making it a standalone company saying there is no synergy between the two.
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The steel ministry had appointed the committee to suggest ways to strengthen operations of four ailing PSUs.
Accordingly, the committee deliberated on their business models, physical and financial performance over the years, capital structure, revival models and other issues and came out with the recommendations.
The steel ministry had accorded top priority to the revival of these units in its 100-day agenda unveiled in June and accordingly the committee was formed.