Sponge Iron’s merger with NMDC gets cabinet nod

May 22nd, 2008 - 7:33 pm ICT by admin  

A file-photo of Manmohan Singh

New Delhi, May 22 (IANS) The union cabinet Thursday approved the long-awaited merger of Hyderabad-based state-run Sponge Iron India Ltd (SIIL) with the National Mineral Development Corporation (NMDC). The merger cleared at the cabinet meeting chaired by Prime Minister Manmohan Singh would be carried out within six months, Finance Minister P. Chidambaram told reporters.

“Merger will take place through acquisition of SIIL shares by NMDC in public interest,” he said.

Chidambaram said the merger would ensure “in-house supply of desired quality and quantity of iron ore” to SIIL’s sponge iron plant at Paloncha, Khamman district in Andhra Pradesh. The state-owned NMDC is a key supplier of iron ore in India.

“The merger will also help in implementing SIIL’s new sponge iron plant by utilising its surplus land and manpower, and financial resources available with NMDC,” said Chidambaram.

During 2006-07, SIIL’s gross income was Rs.563.2 million and cash profit was Rs.75.6 million.

The company was facing acute shortage of iron ore, a problem that will be solved with the merger.

NMDC is mainly active into exploring and developing mineral deposits, and also is engaged in investigating other minerals like low silica, limestone, dolomite, dentonite, tungsten, graphite, and tin.

Its other services include geological exploration and core drilling, preparation of techno-economic feasibility report, resources planning and mine design, pit optimisation through the geostatistical methods engineering design.

Tags: , , , , , , , , , , , , , , , , , , ,

Posted in Business |