Tata Steel has shown interest in renewing the pact that it had signed with National Mineral Development Corporation (NMDC) in 2010 for exploring possibilities of joint ventures for acquisition of mines and setting up steel plants.
Tata Steel and the state-run iron ore miner NMDC had entered into a memorandum of understanding (MoU) on January 22, 2010 for exploring possible joint ventures for acquisition, exploration and development of mines, extraction and processing of minerals and setting up integrated steel plants.
“The MoU lapsed after two years on January 21 this year. NMDC had communicated to Tata Steel four times before the lapse of MoU. Now, Tata Steel is responding with an interest to renew it,” a source in the steel ministry told PTI.
When contacted, a Tata Steel spokesperson said, “We never closed the discussions”. An NMDC official said that it would review Tata Steel’s proposals before signing on the dotted line this time.
“Tata Steel and NMDC plan to jointly address mining and steel-making opportunities. The two companies will set up a working group to explore the areas of cooperation and will submit its report to a steering committee. Thereafter, a decision to enter into joint ventures will be taken,” the earlier MoU had envisaged.
Though a proposal to set up a two-million-tonne-per-annum (mtpa) plant near NMDC’s upcoming steel-manufacturing facility in Chhattisgarh had been mooted, it failed to materialise for various reasons.
NMDC is building a three mtpa steel plant at Nagarnar in Chhattisgarh at an estimated cost of Rs 15,500 crore and has also signed an initial pact with Russia’s Severstal to set up a three mtpa plant in Karnataka.
Meanwhile, Tata Steel is also expanding its steel making capacity in Jamshedpur by three mtpa from 6.8 mtpa now.
The first phase of its proposed six mtpa greenfield plant at Kalinga Nagar in Odisha would be ready by March 2014. It has recently announced plans to set up a Rs 30,000 crore steel plant in Karnataka.
Globally, Tata Steel has 27 mtpa steel making capacity.