The proposal to merge India's largest pig iron producer, Neelachal Ispat Nigam Limited (NINL), with Steel Authority of India Limited (SAIL) has been scrapped following opposition from the Ministry of Commerce, an official at India's Ministry of Steel said on Monday, July 23.
The government-owned Mineral and Metals Trading Corporation (MMTC), under the administrative control of the Ministry of Commerce and the principal promoter of NINL, did not want the merger to be concluded on the grounds that NINL had a lot of growth opportunities to tap independently, the official said.
The merger of NINL with SAIL had been first mooted way back in 2005 and sanctioned by the government. However, at a meeting between the secretaries of the ministries of commerce and steel held last week, the commerce ministry rejected the merger and the steel ministry decided to finally bury the issue, the official said.
NINL has an annual output capacity of 1.1 million mt of pig iron at its plant in the eastern Indian coastal state of Orissa. SAIL, the country's largest integrated steel producer, is on the verge of completing an expansion plan to increase its annual hot metal production capacity to 23.46 million mt from 13.82 million mt per year by March 2013.