The country’s single largest iron ore producer and exporter, NMDC Ltd, hopes to complete the merger of Sponge Iron India Ltd with itself in the next three months.
Plans are afoot to enhance the capacity of its sponge iron plant (acquired through Sponge Iron) at Paloncha in Andhra Pradesh’s Khammam district from the current level of 60,000 tonnes per annum (tpa) to 2,60,000 tpa, Mr Rana Som, Chairman–cum-Managing Director of NMDC, told Business Line here.
Mr Som added that NMDC wants to eventually stop selling sponge iron in the domestic market. Sponge Iron will cease to exist as an entity after merger with NMDC.
“We don’t want to sell sponge iron in the market. We want to sell steel in the market and use the enhanced sponge iron capacity to make steel,” he said.
NMDC has charted out an investment programme of about Rs 26,000 crore over the next five years. Besides expansion of sponge iron capacity, it is also looking to set up a steel plant.
While the company is in a comfortable cash position, indications are that it may go in for a mix of equity and debt resources after a year or so. Any equity issuance then can result in the company getting those resources.
The Steel Ministry has recommended divestment of 8.38 per cent Government stakein NMDC . The entire divestment proceedswill go to the Government and not to NMDC.
Meanwhile, NMDC is also sending a team to Tunisia for inspecting a rock phosphate mine in that country. Mr Som said the company will be part of a consortium headed by Rashtriya Chemicals and Fertilisers (RCF). “After inspection, we may participate in the bid for the rock phosphate mine in Tunisia,” he added.
Source: The Hindu Businessline