Steel Authority of India Ltd (SAIL) today signed a memorandum of understanding with Manganese Ore India Ltd (MOIL) for setting up of a joint venture company (JVC) to produce ferro-manganese and silico-manganese. The Boards of SAIL and MOIL have already given in-principle approval to the proposal for setting up of this JVC.
MOIL in the public sector has large resources of manganese ore in India and is capable of providing high value added inputs. SAIL decided to enter into a strategic alliance with MOIL to ensure regular and quality supply of manganese ore at competitive cost. The proposed JVC will initially supply a projected volume of around 31,000 tonnes of ferro-manganese and 70,000 tonnes of silico-manganese, to meet a part of SAIL's requirement of these ferro-alloys to produce 24 million tonnes of crude steel by 2010, as part of the company's growth plan.
Maharashtra Elektrosmelt Ltd, a SAIL subsidiary, already supplies around 55,000 tonnes of ferro-manganese and 44,500 tonnes of silico-manganese to the steel producer, but this does not meet the company's entire requirement of the ferro-alloys.
The proposed JVC will produce ferro-alloys through three furnaces to be set up in or around Bhilai. Total capital outlay for the proposed JVC is estimated to be Rs. 225 crore. The company will be incorporated with a debt-equity ratio of 1:1 and 50:50 shareholding by SAIL and MOIL.