Public sector mining major NMDC Ltd, which signed a research collaboration agreement with Environmental Clean Technologies (ECT) of Australia in May 2018, has described ECT’s lignite-based steel making technology as “unproven” and one that has “no business relevance for NMDC”.
In response to BusinessLine ’s report, “Miffed with ‘lack of responsiveness’, Australian firm ends JV with NMDC,” the public sector company has said that it feels “it would not be prudent to consider investment in partnership with a company (ECT) that is precariously placed.”
Accordingly, the board of NMDC has decided that the company should not go ahead with the proposal for a collaborative research project, at the heart of which is a ₹150-crore pilot for producing steel.
ECT owns patents for the MATMOR technology that uses low-cost lignite, instead of the costly coking coal, for making steel.
In May 2018, after a few years of negotiations, ECT, NMDC and another PSU, NLC India Ltd, signed the agreement in Australia. While the boards of ECT and NLC ratified the agreement, NMDC’s did not.
Last month, ECT put out a statement telling its shareholders essentially that it was parting ways with NMDC, while still continuing with NLC, based on which BusinessLine published a report.
‘Highly inflated’
In response, NMDC has observed that ECT had “highly inflated” the value of its technology and that ECT’s “credentials were not found to be attractive enough by NMDC to agree for a huge investment in this project.”
It also noted that ECT has been making losses and had expressed its (ECT’s) inability to provide bank guarantees.
“The technology proposed by ECT is unverified/unproven and has no business relevance for NMDC,” the PSU said.
When told about NMDC’s letter, ECT Chairman Glenn Fozard said: “There are a number of factual and material errors that NMDC have failed to identify in their correspondence to you. However, given that confidentiality of the signed MoU survives the termination, we are cautious about correcting this correspondence.”
He said ECT intends to pass on NMDC’s letter to the Indian High Commissioner in Australia, (HM Gondane, who was present when the three partners signed the agreement in May last year), the Australian High Commission in New Delhi “and our legal team and seek their guidance.”