CorporateNMDC to buy majority stake in Kudremukh Iron Ore
State-owned mining giant NMDC is all set to pick up majority stake in Kudremukh Iron Ore Company (KIOCL
), the plan for which figures prominently in the 100-day agenda of the Steel Ministry.
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Outlining the ministry"s 20-point agenda for the next 100 days, Steel Minister Virbhadra Singh said, "It is proposed that NMDC, a Navratna company under the Steel Ministry, will acquire majority stake in Kudremukh Iron Ore Company (KIOCL) and KIOCL will acquire stake in NMDC (in return)."
Throwing some light to the proposed deal, NMDC Chairman and Managing Director Rana Som said the company will pick 51 per cent stake in KIOCL, which would be most likely through share swapping between the two PSUs and a cash component may not be involved.
"It is a challenge, and we will take it," Som said, adding the two companies have synergies to work together and the proposed alliance will benefit both.
The final shape of this "strategic alliance" is being worked by the steel ministry. The "partnership acquisition" will ensure continuous supply of iron ore to KIOCL from NMDC.
Karnataka-based KIOCL, a Mini Ratna PSU under the administrative control of the Steel Ministry, has been facing problems in operating its pellet plants and blast furnace due to closure of mining operations since 2006 on account of environmental issues.