NMDC may wait till late FY22 to demerge its steel unit

New Delhi: Country's largest iron ore producer NMDC may have to wait till the end of monsoon this year before commissioning its three million ton steel plant and initiating the process of its demerger and subsequent disinvestment. Government sources said though 3mt steel plant is likely to be commissioned in July-August, 2021 as per management, it could be delayed beyond monsoon and is likely to coincide with the demerger of the steel plant.

This would allow for completion of work on a byproduct unit and coke oven batteries. So, the demerger process itself may get extended to late this year or in the first quarter of the calendar year 2022, said the sources. In October, the Cabinet Committee on Economic Affairs (CCEA) approved the demerger of the Chhattisgarh-based Nagarnar Steel Plant or NMDC Iron and Steel Plant (NISP) from state-owned NMDC (erstwhile National Minerals Development Corporation) and strategic disinvestment of the demerged entity by offloading the entire government shareholding to a buyer. The Board of Directors of the NMDC in August had already accorded in-principle proposal to demerge the NSP with itself.

The NSP is a three million ton per annum (mta) Integrated Steel Plant being set up by the NMDC at Nagarnar in Chhattisgarh's Bastar district in an area of 1,980 acres at revised estimated cost of Rs 23,140 crore. As of October, the NMDC has invested Rs 17,186 crore on the project out of which Rs 16,662 crore is from its own funds and Rs 524 crore has been raised from bond market. But the project has faced several delays and in the current economic situation, the NMDC was also finding it difficult to fully finance the project. The company had been raising non-convertible debentures for completing the steel project.