NMDC began discussing a proposed steel project with Russia’s Severstal in October. By December the deal was finalised. That’s the pace at which Rana Som, Chairman and Managing Director of NMDC, works. In an interview to Ishita Ayan Dutt, he spells out the contours of the arrangement with Severstal and the acquisitions going forward. Edited excerpts:
Apart from the Karnataka steel project, what does the MoU with Severstal entail?
There are four to five features to the memorandum. The MoU will bring in the first foreign investment in the steel sector. They will bring in technology, especially auto grade, for which they are famous and supply to the US steelmakers. There are some linkages as well. We want the plant to be financially viable. So, Severstal will supply coal and will also consider supplying to our Chhattisgarh plant.
Will they supply coking coal at market rate?
The terms will be the same as for our supply of iron ore, which will be discounted from the market prices. Moreover, Severstal will share coking coal from its Siberian project, where the joint venture will have equity.
So, the plant will have 100 per cent raw material security?
Eventually, yes. In India, we will apply for iron ore mines. The joint venture will have coking coal and iron ore mining arms. Independent joint ventures can be worked out.
The plant capacity is 2 million tonnes. Can it be expanded?
Initially, we will have two million and eventually five million tonnes. Karnataka government has allotted 3,000 acres. Once we get possession, we will move for environment clearance.
In Chhattisgarh, are you going alone?
Yes.
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What is the status of your other MoUs with Rio Tinto and Tata Steel?
We will meet Rio soon to re-identify our areas of co-operation. With Tata Steel, we have a joint working group, and will meet this month to finalise terms before forming the joint venture.
What is the status of the acquisitions that NMDC was eyeing?
We are working very hard on the acquisitions.
Are you bidding for Kolmar coking coal deposits?
We have started technical due diligence. We will complete technical and financial due diligence by January and then put in a bid.
What about Atlas iron ore, where you were part of a consortium?
For Atlas, we will leverage our mining expertise and collaborate with the management.
Does it mean that you are now vying for management control in the assets?
Obviously we want management control, but that can be forgone if we have a definite offtake agreement.