India-based iron ore miner NMDC has announced that the final agreement on a 50-50 steel plant joint venture in the southern India state of Karnataka which had been expected to be signed between the company and Russia's largest steelmaker Severstal this month has been delayed by two months. Due to a market survey and negotiations for additional coking coal supplies, the joint venture agreement is now expected to be signed by August.
The new plant to manufacture auto grade steel will have an annual capacity of 2 million mt which can be further expanded to 5 million mt. The investment in the new steel plant is likely to be $5.5 million.
In December, the two companies agreed to build the steel plant in question, with NMDC to supply iron ore and Severstal to source coking coal from its mines in Russia.
Shri S. Thiagarajan, NMDC's director of finance, said they are negotiating with Severstal for additional coal supplies for the plant and this is reason for the delay.