NMDC to merge sponge iron maker SIIL

National Mineral Development Corporation Ltd (NMDC) is in the process of merging another state-run firm in the steel sector, Sponge Iron India Limited (SIIL).

The central government has issued the necessary order in respect of scheme of amalgamation, minister of corporate affairs Salman Khurshid informed the Lok Sabha in a written reply today.

He said the ministry of corporate affairs had considered the scheme of amalgation filed by the two companies under sections 391-394 of the Companies Act, 1956 and issued necessary orders on 18 January 2010.

SIIL was set up in the 70s to develop alternate steel-making technologies that did not require coking coal for the production of iron and steel.

While the Direct Reduction Processes based on pellets and natural gas was firmly established at that time, those based on lump ore and non-coking coal were not proven. However, considering its potential as relevant to our raw material situation, the government decided to establish a semi-commercial 'demonstration plant' so that raw materials available in the country could be extensively tested and process regimes developed. The demonstration plant later matured into a commercial scale plant - Sponge Iron India Ltd (SIIL) - for manufacturing sponge iron.

Mining giant NMDC, meanwhile, is joining hands with state-run steel major SAIL to develop a limestone project at Arki in Himachal Pradesh. The two have also signed a memorandum towards this.

NMDC is holding the mining lease for limestone in Arki. The deposit has about 100 million tonnes of SMS grade limestone, a valuable input for steelmaking. The supply from this project will ensure limestone raw material security for the steel plants of SAIL and also to the NMDC's steel plant being put up at Nagarnar in Chhattisgarh.