NMDC Ltd and Severstal of Russia sign MoU for setting up a steel plant in Karnataka
merisarkar news service
New Delhi, December 10, 2010
Rana Som & Alexi Mordashov
A Navratna Public Sector Undertaking under the Ministry of Steel NMDC Ltd and OJSC Severstal, a leading steel and mining company of Russia signed a Memorandum of Understanding (MoU) to set up a joint venture steel plant in India. The MoU was signed by the CMD of NMDC, Mr. Rana Som and CEO of Severstal, Mr. Alexey A Mordashov in New Delhi on Friday.
Union Minister of Steel Virbhadra Singh, the Minister of State for Steel, A. Sai Prathap, Ambassador of the Russian Federation in India, Mr. Alexander M. Kadakin and the Secretary, Ministry of Steel Mr. P.K. Misra were also present at the occasion.
The MoU was signed to establish a Joint Venture Company to build an integrated steel plant in India. The Joint Venture Company proposes to have its captive coking coal mining subsidiary in Russia and iron ore mining subsidiary in India which will ensure long term supply of these critical steelmaking raw materials to the proposed steel plant.
Time tested friends: Virbhadra Singh
The plant will be constructed in the state of Karnataka. It will have an initial capacity of 2 Million TPA which is expandable to 5 Million TPA. NMDC and Severstal each will have a 50% shareholding in the Joint Venture and will appoint the senior management team.
The Union Minister of Steel, Virbhadra Singh said that the MoU is not just reflect the co-operation between these two companies, but is a step towards strengthening friendship and collaboration between India and Russia, who are time-tested friends. He hoped that the initiative of NMDC and Severstal to explore possibilities of mutual cooperation in the field of steel making and coking coal mining is a welcome step and it would take both the companies to new horizons.
PK Misra, Steel Secretary, said that India is poised for an economic take off with a GDP growth of 8.5 to 9%, which opens up a great opportunity for steel makers to make investments in India and take advantage of the emerging market in the country.
$ 2 billion will be invested: Rana Som
PK Mishra said in this context, the initiative of NMDC and Severstal to explore possibilities of mutual cooperation for setting up an integrated steel plant in India is appreciable.
He said, NMDC is primarily a mining company, which is expanding and diversifying its activities by forward integration into steel with its first steel plant coming up in Nagarnar in Chhatisgarh.
NMDC is also planning a steel plant in Karnataka and this MoU between Severstal and NMDC is for mutual cooperation for setting up this steel plant.
Mr. Rana Som, CMD of NMDC Limited said on the occasion that their estimate is that the proposed Greenfield plant would require an investment of Rs. 8-9,000 crores and NMDC will invest 50 per cent of it and the rest 50 per cent will be invested by Severstal.
