SAIL plans JV with Manganese Ore

To ensure long-term security of critical raw materials, Steel Authority of India (SAIL), which has earmarked Rs 40,000 crore for capacity expansion, has proposed to form a JV with Manganese Ore India (MOIL) besides picking up stake in an SPV to be floated for acquisition of coal mines abroad.

The proposed joint venture with MOIL, also a unit under the steel ministry, would produce ferro-manganese and ferro silicon with installation of three furnaces at Bhilai and a total proposed capital outlay of Rs 225 crore, SAIL chairman S K Roongta said yesterday.

He said SAIL has decided to pick up stake in a proposed special purpose vehicle to be floated by five PSUs including Rashtriya Ispat Nigam, Coal India, National Thermal Power Corporation and National Mineral Development Corporation for acquisition of coal mines abroad. He, however, did not give details of the proposed SPV.

Reports said the five PSUs would invest Rs 4,000 crore in the proposed SPV, and SAIL is expected to contribute Rs 1,000 as equity.

Roongta said that besides the Rs 40,000 crore capacity expansion programme, SAIL has decided to set up a greenfield plant with a capacity of 6 million tonne in Jharkhand in lieu of the renewal of leases of iron ore mines at Chiria, which have reserves of two billion tonne. SAIL has already communicated its decision to the Jharkhand government, which wanted value-addition to iron ore sourced from the state.