Even as the Indian government has approved inviting a strategic investor for iron ore miner NMDC’s Nagarnar steel project, the Ministry of Steel is seeking an operator as an alternate plan for the steel mill which is close to commissioning, a senior government official said on Friday.
The official said that, while India’s Cabinet Committee for Economic Affairs approved inviting a strategic investor for the Nagarnar steel mill, it is thought an alternative plan to engage an operator for the steel mill is necessary as most domestic steel companies are financially stressed and global investors’ appetite for investment in the steel sector is low.
The government official said that the Ministry of Steel will be looking at other government-owned and operated steel companies which could be engaged to run and operate NMDC’s steel project.
Government-owned NMDC is constructing a 3 million mt per year steel mill entailing an investment of $2.20 billion located in the Bastar district of Chhattisgarh state in central India. The project is scheduled to go into production next year.
The official said that the Ministry of Steel has already held preliminary discussions with government-owned steel producers but has declined to identify these companies.
Several steel industry sources, however, pointed out that the ministry’s look out for a government company to operate NMDC’s greenfield steel mill has also stemmed from opposition to divesting equity to private investors.
Some political opposition parties in Chhattisgarh state have been holding protests against what is perceived as the privatization of NMDC’s steel project, the sources said.