Iron ore miner NMDC is in favour of inducting a third partner with operational expertise on its Rs2200 crore joint venture with Rashtriya Ispat Nigam (RINL) for setting up a 450km slurry pipeline and an iron pellet plant annually producing 10 million tonnes. The pipeline is proposed to run from Jagadalpur in Chhattisgarh to Visakhapatnam in Andhra Pradesh.
The two state-run firms, under the administrative control of India’s Steel Ministry, signed an MoU for the venture in May last year. It is believed that NMDC wants a third partner to be entrusted with the job of operating the project as well as giving it some equity stake.
Induction of a new partner would require the approval of the Steel Ministry. NMDC has written to the Ministry expressing its intention while RINL is expected to take the matter to its next Board meeting for further deliberations.
Out of the total investment, Rs1200 crore would be used to lay the pipeline and the remaining Rs1000 crore for setting up the pellet plant. The pipeline, which is intended to pass through Chhattisgarh, Odisha and Andhra Pradesh, would be operational by 2015-16 and result in transport savings for the joint venture.
The 450km pipeline could have been shorter by 150km and required Rs600 crore less investment had it passed through the forest areas, which is not possible in view of the insurgency problem in the area. The pipeline will, therefore be routed along the national highways to avoid insurgency problems.
RINL has a long-term agreement with NMDC for its iron ore requirement, which is being met from NMDC's mines in Bailadila, which are transported mainly by railway. NMDC has plans to increase its production capacity from the Bailadila sector from 25 million to 50 million tonnes annually.