The mining Navaratna NMDC is known for planning ahead. It is now looking for a partner to set-up a 400 mw power plant in Chhattisgarh. The purpose is to meet the requirements of its upcoming three million-tonne steel plant in the state. The NMDC CMD Rana Som led management team knows that it takes time to choose a partner and also to set up the plant. The company does not want to suffer any delay.
Already the company held discussions with more than 25 interested bidders in its headquarter in Hyderabad. A senior official informed media, “We want to set-up a 400 mw power plant in Chhattisgarh, of which about 200 mw will used for our steel plant in the state. For that, we are looking for a joint venture partner.”
The official added that NMDC will have a minority stake of about 26% in the proposed plant, while rest of the equity would be held by the joint venture partner. Besides this, the joint venture partner will have the freedom to sell rest of the power to the grid in the open market or within the state of Chhattisgarh.
“We aim to commission the plant by the end of 2013, so that it meets our requirements when our steel plant gets operational,” the official told media. NMDC did not decide on the fuel — whether it would be coal or gas. In all probability the joint venture partner will contribute to the decision on fuel.
To produce 400 mw of electricity the project will require roughly Rs. 2,000 crore worth investment. Assuming a debt-equity ratio of 1:1, the equity investment will be around Rs. 1,000 crore of which NMDc will contribute Rs. 250 crore. But the same at best is a guess since negotiations are at an early stage. NMDC too did not comment on the investment it proposed in the facility.
Meanwhile construction work on NMDC’s green-field steel factory is in full swing. The three million-tonne plant, a dream project for the natives of the mineral rich land, is expected to be commissioned on schedule, by the end of 2014-15.
The Navratna company is making an investment of about Rs. 15,000 crore for setting-up the integrated steel making facility at Nagarnar in Chhattisgarh and had completed the land acquisition in last August.
It has also secured all regulatory clearances like environment, forest and water among others and has awarded two packages for the construction of the steel plant. This includes an order of Rs. 760 crore turnkey execution of a sinter plant complex there to a consortium of Siemens VAI, SVAI India and NCC.
Sinter is a clinker like aggregate normally produced from relatively coarser fine iron ore. This is a highly preferred input in blast furnaces. It improves the operation of blast furnace operation, productivity and reduces coke consumption. At present, more than 70% of hot metal in the world and 50% in India are produced through sinter.
NMDC has also signed the contract for setting up the country’s largest blast furnace with Tata Projects Ltd, Danieli Corus,Netherlands and Danieli Corus, India. The blast furnace, with a capacity of 4506 cubic metre, will be part of the three million tonne integrated steel plant being set up by the iron ore miner at Nagamar in Chhattisgarh, as part of its forward integration.
Rana Som said the proposed steel plant would be the “fastest moving steel plant project among all green-field or even brown-field projects in the country.”
NMDC expects the consortium to commission the blast furnace within 33 months. It will be designed to produce 9,900 tonnes per day with a modern refractory and soft water closed loop system. The furnace will have pulverized coal injection system to reduce operating costs and improve productivity.
Apart from Chhattisgarh, NMDC also has a joint venture with Russia’s Severstal. It plans to set up a 2 million tonne per annum steel plant in Karnataka. Work on the project is likely to start next year. NMDC-Severstal to invest Rs. 9,000 cr in Karnataka steel plant
NMDC, the country’s largest iron ore producer, and Russian steel maker OJSC Severstal will jointly invest Rs. 9,000 crore to set up the proposed five-million-tonne steel plant at Bellary, Karnataka. The decision was sealed during the bilateral meeting between the Commerce and Industry Minister Anand Sharma, and the Minister of Economic Development of the Russian Federation Elvira Rebelling, at St Petersburg. This is a formal approval of the MOU that NMDC had signed with Severstal in December last year.
Initially the plant will have al capacity of 2 million tones per annum. The same will eventually be expanded to 5 mtpa. Construction of the plant, to be spread over 2,800 acres, would start in 2012 and is to be completed within 36 months.
As mentioned, the two companies had signed an MoU last December for a 50:50 joint-venture. The joint venture would have its captive coking coal mining subsidiary in Russia and iron-ore mining subsidiary in India to ensure long-term supply of these raw materials.
Severstal will share its latest technology for the proposed plant, which will focus on producing superior grade steel used in sectors such as automobiles. Severstal, which is among the world’s top 10 steel makers, operates steel plants in Russia, the US and Europe.
In the meantime NMDC has also finalised Rs. 3,000-crore pipeline project. CMD Som had announced last year while declaring the company’s annual result. The slurry pipeline will evacuate ore from NMDC’s Bailadila mines in Chhattisgarh to Visakhapatnam in Andhra Pradesh.
“I have just finalised the complete structure of laying the pipeline for evacuation of material from our Bailadila mines to Jagdalpur in the first stage and to Vizag in the second stage,” Som informed media.
He said that the company decided to set up the pipeline, connecting Bailadila with Vizag steel plant, because evacuation of iron ore from the mines had been posing a problem after Essar’s slurry pipeline was damaged beyond repair. There had been severe constraints in rail movement due to the Naxal movement in the region.
In the first phase, the company would lay a 150-km pipeline from Bailadila to Jagdalpur in 18 months at an investment of Rs. 1,000 crore. The second phase would see laying of pipeline from Jagdalpur to Visakhapatnam at an investment of Rs. 2,000 crore. “We won’t wait for completion of Phase-I. We might as well execute Phase-II simultaneously,” Som said. The aim is to connect the mines to the user industry and port.
The execution of the project, according to Som, will enable NMDC to dispatch an additional 6-7 million tonnes (mt) of ore. “To that extent, the production will also go up," he said, emphasizing that production and evacuation of ore were interlinked. Apart from the pipeline, NMDC has entered into a memorandum of understanding with Indian Railways for laying of an additional railway line between Bailadila and Jagdalpur.
NMDC has agreed to bear the entire cost of the line, estimated to be Rs. 850 crore. Som said railway authorities had also agreed to improve ore evacuation on the existing single line between Jagdalpur and Vizag by laying loop lines wherever necessary and ensuring frequent movement of goods trains.
The Bailadila mines account for nearly 70 per cent of NMDC’s iron ore production, which stood at 23.8 mt in 2009-10. Besides, NMDC is setting up a Rs. 15,525-crore, 3-mtpa steel plant, a Rs. 1,000-crore pelletisation plant and a Rs. 600-crore beneficiation plant at Nagarnur near Jagdalpur.
NMDC has shown how determination can take a company to a greater height. The largest public sector steel manufacturer SAIL should do well to take a leaf out of the NMDC success and use the same to overtake its private sector competitors.
Already the company held discussions with more than 25 interested bidders in its headquarter in Hyderabad. A senior official informed media, “We want to set-up a 400 mw power plant in Chhattisgarh, of which about 200 mw will used for our steel plant in the state. For that, we are looking for a joint venture partner.”
The official added that NMDC will have a minority stake of about 26% in the proposed plant, while rest of the equity would be held by the joint venture partner. Besides this, the joint venture partner will have the freedom to sell rest of the power to the grid in the open market or within the state of Chhattisgarh.
“We aim to commission the plant by the end of 2013, so that it meets our requirements when our steel plant gets operational,” the official told media. NMDC did not decide on the fuel — whether it would be coal or gas. In all probability the joint venture partner will contribute to the decision on fuel.
To produce 400 mw of electricity the project will require roughly Rs. 2,000 crore worth investment. Assuming a debt-equity ratio of 1:1, the equity investment will be around Rs. 1,000 crore of which NMDc will contribute Rs. 250 crore. But the same at best is a guess since negotiations are at an early stage. NMDC too did not comment on the investment it proposed in the facility.
Meanwhile construction work on NMDC’s green-field steel factory is in full swing. The three million-tonne plant, a dream project for the natives of the mineral rich land, is expected to be commissioned on schedule, by the end of 2014-15.
The Navratna company is making an investment of about Rs. 15,000 crore for setting-up the integrated steel making facility at Nagarnar in Chhattisgarh and had completed the land acquisition in last August.
It has also secured all regulatory clearances like environment, forest and water among others and has awarded two packages for the construction of the steel plant. This includes an order of Rs. 760 crore turnkey execution of a sinter plant complex there to a consortium of Siemens VAI, SVAI India and NCC.
Sinter is a clinker like aggregate normally produced from relatively coarser fine iron ore. This is a highly preferred input in blast furnaces. It improves the operation of blast furnace operation, productivity and reduces coke consumption. At present, more than 70% of hot metal in the world and 50% in India are produced through sinter.
NMDC has also signed the contract for setting up the country’s largest blast furnace with Tata Projects Ltd, Danieli Corus,Netherlands and Danieli Corus, India. The blast furnace, with a capacity of 4506 cubic metre, will be part of the three million tonne integrated steel plant being set up by the iron ore miner at Nagamar in Chhattisgarh, as part of its forward integration.
Rana Som said the proposed steel plant would be the “fastest moving steel plant project among all green-field or even brown-field projects in the country.”
NMDC expects the consortium to commission the blast furnace within 33 months. It will be designed to produce 9,900 tonnes per day with a modern refractory and soft water closed loop system. The furnace will have pulverized coal injection system to reduce operating costs and improve productivity.
Apart from Chhattisgarh, NMDC also has a joint venture with Russia’s Severstal. It plans to set up a 2 million tonne per annum steel plant in Karnataka. Work on the project is likely to start next year. NMDC-Severstal to invest Rs. 9,000 cr in Karnataka steel plant
NMDC, the country’s largest iron ore producer, and Russian steel maker OJSC Severstal will jointly invest Rs. 9,000 crore to set up the proposed five-million-tonne steel plant at Bellary, Karnataka. The decision was sealed during the bilateral meeting between the Commerce and Industry Minister Anand Sharma, and the Minister of Economic Development of the Russian Federation Elvira Rebelling, at St Petersburg. This is a formal approval of the MOU that NMDC had signed with Severstal in December last year.
Initially the plant will have al capacity of 2 million tones per annum. The same will eventually be expanded to 5 mtpa. Construction of the plant, to be spread over 2,800 acres, would start in 2012 and is to be completed within 36 months.
As mentioned, the two companies had signed an MoU last December for a 50:50 joint-venture. The joint venture would have its captive coking coal mining subsidiary in Russia and iron-ore mining subsidiary in India to ensure long-term supply of these raw materials.
Severstal will share its latest technology for the proposed plant, which will focus on producing superior grade steel used in sectors such as automobiles. Severstal, which is among the world’s top 10 steel makers, operates steel plants in Russia, the US and Europe.
In the meantime NMDC has also finalised Rs. 3,000-crore pipeline project. CMD Som had announced last year while declaring the company’s annual result. The slurry pipeline will evacuate ore from NMDC’s Bailadila mines in Chhattisgarh to Visakhapatnam in Andhra Pradesh.
“I have just finalised the complete structure of laying the pipeline for evacuation of material from our Bailadila mines to Jagdalpur in the first stage and to Vizag in the second stage,” Som informed media.
He said that the company decided to set up the pipeline, connecting Bailadila with Vizag steel plant, because evacuation of iron ore from the mines had been posing a problem after Essar’s slurry pipeline was damaged beyond repair. There had been severe constraints in rail movement due to the Naxal movement in the region.
In the first phase, the company would lay a 150-km pipeline from Bailadila to Jagdalpur in 18 months at an investment of Rs. 1,000 crore. The second phase would see laying of pipeline from Jagdalpur to Visakhapatnam at an investment of Rs. 2,000 crore. “We won’t wait for completion of Phase-I. We might as well execute Phase-II simultaneously,” Som said. The aim is to connect the mines to the user industry and port.
The execution of the project, according to Som, will enable NMDC to dispatch an additional 6-7 million tonnes (mt) of ore. “To that extent, the production will also go up," he said, emphasizing that production and evacuation of ore were interlinked. Apart from the pipeline, NMDC has entered into a memorandum of understanding with Indian Railways for laying of an additional railway line between Bailadila and Jagdalpur.
NMDC has agreed to bear the entire cost of the line, estimated to be Rs. 850 crore. Som said railway authorities had also agreed to improve ore evacuation on the existing single line between Jagdalpur and Vizag by laying loop lines wherever necessary and ensuring frequent movement of goods trains.
The Bailadila mines account for nearly 70 per cent of NMDC’s iron ore production, which stood at 23.8 mt in 2009-10. Besides, NMDC is setting up a Rs. 15,525-crore, 3-mtpa steel plant, a Rs. 1,000-crore pelletisation plant and a Rs. 600-crore beneficiation plant at Nagarnur near Jagdalpur.
NMDC has shown how determination can take a company to a greater height. The largest public sector steel manufacturer SAIL should do well to take a leaf out of the NMDC success and use the same to overtake its private sector competitors.
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