The Hindu : Business : SAIL nod for Indian Iron merger

Online edition of India's National Newspaper
Wednesday, Sep 29, 2004

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Business

SAIL nod for Indian Iron merger

By Our Special Correspondent

NEW DELHI, SEPT. 28. The Steel Authority of India Limited's board of directors today agreed in principle for the merger of the company's wholly owned subsidiary, Indian Iron & Steel Co. Ltd (IISCO), with parent company. Steps for obtaining clearance and necessary approvals from the Government and appropriate authorities will now follow shortly.

While sharing the merger plan with the company's shareholders at their 32nd annual general meeting here, V. S. Jain, Chairman, SAIL, said, "In today's environment the priority is to attain growth with synergy. SAIL requires resources for growth and IISCO provides the opportunity in terms of infrastructure, resources and excellent work culture".

Joint venture for mining

In another development, SAIL also signed a memorandum of understanding with Kudremukh Iron Ore Co. Ltd (KIOCL) for forming a 50:50 joint venture company to develop iron ore mines at Barsua, Taldih and Kalta in Orissa. The joint venture company will synergise the experience and expertise of the two PSUs and add value to the country's mining operations.

SAIL is the largest producer of iron ore with an annual production of around 20 million tonnes, while KIOCL operates and maintains the single largest iron ore mine in India besides having expertise in production of iron oxide pellets.

The joint venture is expected to be a trendsetter in the area of iron ore mining in India. The MoU envisages incorporation of modern mining facilities to produce superior quality iron ore for meeting the requirements of some of the SAIL plants and further value addition through installation of a pellet plant. MECON has been engaged to prepare the feasibility report for the project while NMDC will undertake ore characterisation study.

Addressing the annual meeting, Mr. Jain provided a complete picture of the "multi-dimensional turnaround" made by the organisation by touching new heights in efficiency, growth and profitability during the last financial year. Observing that the company could just wipe out its accumulated losses after achieving a record profit during 2003-04, he said the SAIL board would consider the issue of dividend payment at the appropriate time depending on the future performance of the company.

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