The country's largest iron ore producer NMDC today said it will review its plans to invest Rs 1,200-crore in the secondary steel maker Sponge Iron India (SIIL) due to volatility in sponge iron prices.
"We have now decided to review our plans to invest Rs 1,200-crore in SIIL as the prices of sponge iron has remained volatile for some months," NMDC Chairman Rana Som told PTI today.
"A financial study and a feasibility study for expansion and diversification of SIIL is underway and based on that we will take a final decision soon," he added.
Nearly two years after the government cleared the merger between the two entities, the Corporate Affairs Ministry last week passed an order for the merger of SIIL with NMDC on January 18.
The MCA had convened a hearing last November to allay fears, if any, of shareholders or any related parties on the proposed merger. NMDC was expecting to close the merger by October 2008 after the Cabinet had cleared the merger proposal in in May 2008, under which SIIL would get financial support and assured supply of iron ore from NMDC.
Sponge iron prices are showing signs of recovery after falling by over 50 per cent till November last year.