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Home arrow News arrow Business News arrow NMDC Signs MoU With Russia's OJSC Severstal to Set Up a Steel Plant in India
NMDC Signs MoU With Russia's OJSC Severstal to Set Up a Steel Plant in India Print E-mail
Written by Ganesh   
Saturday, 11 December 2010
New Delhi: NMDC Ltd., a Navaratna Public Sector Undertaking of Ministry of Steel 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 plant, which will be constructed in the state of Karnataka, 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 MoU was signed to establish a Joint Venture Company to build an integrated steel plant in India. The JVC 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.

The MoU was signed by the CMD of NMDC, Shri Rana Som and CEO of Severstal, Mr. Alexey A Mordashov here today. Union Minister of Steel, Shri Virbhadra Singh, the Minister of State for Steel, Shri A. Sai Prathap, Ambassador of the Russian Federation in India, Mr. Alexander M. Kadakin and the Secretary, Ministry of Steel Shri P.K. Misra were also present at the occasion.

Both firms would invest a total of Rs 9,000 crore in the plant near Bellary in Karnataka, said Rana Som, Chairman, NMDC.

"The MoU is an important development for us as it will establish the steel plant in one of the most attractive growth markets in the world," said Mr Alexey Mordashov, CEO, Severstal.

The Union Minister of Steel, Shri 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.

Minister of State for Steel, Shri A. Sai Prathap said that the steel making expertise and global presence of Severstal would complement the mining expertise and strong Indian presence of NMDC and will benefit both the companies. He hoped that the MoU would pave the way for setting up of technical marvel in the field of steel making, which may become a benchmark for the global steel industry.

The Secretary, Ministry of Steel, Shri P.K. Misra 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. He 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.

 
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