The proposal has been sent to the Department of Public Enterprises (DPE) under the Ministry of Finance. The merger will give NMDC access to KIOCL’s ready-made export oriented unit having production capacity of 4 million TPA.

Jan 8, 2025

The Ministry of Steel has proposed a merger of the leading iron-ore producer NMDC with Kudremukh Iron Ore Company Limited (KIOCL), the only iron miner in the country having an export-oriented unit.

As per media reports, the proposal was sent to the Department of Public Enterprises (DPE) under the Ministry of Finance around a month back. They said details of the proposal, including the financial implications or transactional values, were being worked out. It was expected that the merger would get approval from the Finance Ministry soon.

The report said the NMDC was keen on the proposal since this would give it access to a ready-made export oriented unit having production capacity of 4 million TPA. It would have taken the INR 22,000 crore company over five years to set up an export oriented unit.

KIOCL, a CPSU under the Ministry of Steel, had recently floated tenders for securing hematite (high-grade iron ore) from indigenous sources. 

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As per sources mentioned in the report, if a pellet plant remained unused for a long time, it became difficult to re-start operations. In order to keep the plants afloat and also to keep the company running, KIOCL recently leased out operations of one of its pellet plants to NMDC. Taking over the pellet plant by NMDC would enable the company to use its own iron ore, thus reducing the cost of operations.