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All set for merger of NMDC, Sponge Iron India Limited

KHAMMAM: The Palaoncha-based Sponge Iron India Limited (SIIL) will soon be able to find a permanent solution to the basic raw material problems being faced by it for quite some time.

The stage has been set for the merger of the company with the National Mineral Development Corporation Limited (NMDC).

If everything goes well, the merger is likely to materialise some time before March next, according to official sources. The merger was recommended by the expert group constituted by the Ministry of Steel under the chairmanship of B.L. Das, former Secretary (Steel). The group studied the merger proposals between the various public sector undertakings under the Ministry.

The Government has directed both the SIIL and the NMDC to go ahead with the move. Both the boards have given the green signal for the merger proposal, which is expected to help the SIIL unit overcome the problem of iron ore availability once and for all. Two directors of the NMDC visited the SIIL campus in July last and took stock of the facilities and operations in the unit. The employees unions of the SIIL also welcomed the merger move.

The SIIL has an installed capacity to manufacture 60,000 TPA of sponge iron. It has a captive power plant to generate 5 MW. It has been equipped with the necessary infrastructure besides owning some 320 acres of land. The NMDC is keen on taking up a Rs. 300-crore expansion programme in the SIIL.

It is planning to have two more units each of 1 lakh TPA capacity. The installed capacity of the captive power plant would be augmented by another 10 to 11 MW. SIIL, which was doing well despite other constraints, is expected to post a profit of more than Rs 5 crore in the current financial year.

SIIL is an enterprise with the Centre owning 97.44 per cent while the remaining was held by the State Government. The Government had earlier proposed the merger of SIIL with the Vizag Steel Plant, but it did not materialise.

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