NMDC in talks with SAIL to produce steel

State-owned National Mineral Development Corporation Ltd on Tuesday said it was planning to foray into steel production.

The iron ore major has proposed a joint venture steel plant with domestic and international steel majors including Steel Authority of India Ltd. and Nippon Steel Corp. of Japan, a senior NMDC official said.

"We are planning to set up a steel plant in Chattisgarh as part of our efforts to further add value to our existing operations," the official said.

"We have offered to enter into a joint venture with leading steel makers both in India and abroad for setting up a steel plant," he said.

Besides SAIL and Nippon, NMDC has been in talks with Rashtriya Ispat Nigam Ltd. and Baoshan Iron and Steel Co Ltd of China.

The official declined to give details when asked of the size of the proposed venture. He said talks were still at a preliminary stage and detailed reports would have to drawn up after getting a nod from the prospective partners.

The official, however, said that an optimal size steel plant would require a capacity of at least 1.6-2.0 million tonnes per annum. So far, NMDC has remained by and large an iron ore producer, tapping Bailadila mines in Chattisgarh for high-grade iron ore, which is mostly exported to Japan and other countries.

NMDC currently exploits seven of the 14 iron ore deposits in the Bastar region. The company produced 18 million tonnes of iron ore in 2003-04.

While diversification would help NMDC in value-addition, a joint venture partner would help bring in the much-needed expertise in steel production.

NMDC would use the JV to get further leases and increase its iron ore production in the state, the official said.

Shares of NMDC were last traded on the BSE on Monday at Rs 484.75, up 4.6 per cent over the previous close.