Tata Steel and NMDC signed a memorandum of understanding (MoU) to examine setting up of joint alliances in mines and steel, in 2010. However, after several round of talks to set up a steel plant, the two have companies have now decided against any cooperation.
A joint committee was formed to assess NMDC’s two steel plants in the states of Karnataka and Chhattisgarh. At that time, NMDC’s Bellary steel plant was proposed for a possible partnership with Tata Steel.
Since then, NMDC announced a joint venture with Russia’s Severstal in Karnataka.
Tata and NMDC talked about a jv to build 3Mt/y capacity steel plant in Jagdalpur Chhattisgarh, at a cost of about Rs1600000M ($28.4bn). NMDC required a 1775 acre site and received the environment permits. In January 2011, NMDC said it would also build another steel plant of 2Mt/y capacity in Chhattisgarh and was in talks with various companies for a joint venture.
Tata Steel, too, was in talks for this project. The plant was estimated to cost about Rs 100000M, ($1.779bn) and NMDC was confident of an announcement soon. However, there has been no word on the plant and Tata Steel confirmed it would not be partnering with NMDC to build it.
Tata Steel recently, added 2.9Mt/y of steelmaking capacity at its flagship Jamshedpur plant and was fully committed to its new plant in the state of Orissa. The first phase of 3Mt/y capacity is expected to commission by 2014. The total capacity of the Orissa plant is to be 6Mt/y and the company plans to spend Rs 345000M ($6.13bn) on the same. The MoU statement had read, “Both NMDC and Tata Steel have agreed to co-operate to explore possibilities of entering into joint ventures for the purpose of acquisition, exploration and development of mines, extraction and processing of minerals, setting up integrated steel plants and any other business which is of mutual interest to both organisations.” The statement further said, "In the current scenario, where the nation’s steel policy envisages a doubling of steel-making capacity over the next decade, a wonderful opportunity has presented itself for both the companies to work together towards this goal.
Tata Steel and NMDC plan to jointly address mining and steel-making opportunities." If successful, the two could have leveraged on each other’s strong fronts to build a steel plant. NMDC with its iron ore resources and Tata Steel with its steel making prowess could have been a perfect match. Now, NMDC has tied-up with Severstal for its 5 million tonne Bellary steel plant. Coking coal for the plant would be supplied by the Russian company from its mines in Russia at a discounted price. Also, NMDC had made it clear to the government that it wanted additional allocation of iron ore mines for the steel plants and would use ore from its current mines. . .