India's largest iron ore miner NMDC Limited and Russian steel producer Severstal are yet to agree on management control of their proposed three million mt annual capacity steel plant to be constructed in Bellary district in the southern Indian province of Karnataka, a senior NMDC official told SteelOrbis on Monday, June 11.
After signing of a memorandum of understanding (MoU) between the two companies in 2010, legal consultants have been appointed by the two sides to finalize a 50:50 joint venture to implement the project but differences on the issue of management control would not enable the agreement to be concluded anytime before the end of this year, the official said.
"The issue of management control would be decided at the highest level of the company. As a government majority owned company, the NMDC board would decide on management control as per advice received from the Ministry of Steel," the official said.
NMDC and Severstal have proposed to invest $3.62 billion to construct a three million mt per year steel plant, mostly for the production of long products in Karnataka in the first phase and to ramp it up to five million mt per year in the second phase. The project would be linked to Severstal's coking coal assets in Russia and iron ore from NMDC's Bailadila mines in Chattisgarh province in central India.
NMDC, India's largest iron ore miner, currently produces 27 million mt per year of iron ore and has drawn up plans to increase its output to 50 million mt by 2017.