Despite Steel Authority of India ltd (SAIl) having finalised the joint venture (JV) with Japanese major Kobe Steel in July last year for setting up a Rs 1,500 crore iron ore nuggets plant in Durgapur, the ambitious project may get delayed as that company's US-based plant where the ITmK3 patented technology which the far-east Asian company is to bring on board, was to be tested first, is yet to reach its full capacity.
SAIl at the same time is ready to wait for some more time, as it wants to be fully sure of the technology before putting it to use in the JV project, source said.
When SAIl had signed the MoU with Kobe Steel for setting up a 0.5 million tonnes per annum (mtpa) capacity nuggets plant in Durgapur (West Bengal), the USP of the JV was that the Japanese company was bring on board its patented ITmK3 technology, which is yet to be put to use anywhere in the world.
The hitch, however, is that Kobe's Minnesota-based nuggets manufacturing plant where the technology was first to be tested (since it is a virgin know-how developed by it) has not reached its full capacity, and till that happens, the SAIl-Kobe JV project's implementation stands delayed by at least six months.
Official sources said that SAIl on its part though is not in a hurry as the Government wants to be fully sure about the technology before it arrives in the country.
A source privy to the development told The Pioneer that SAIl would like to be fully sure about the accuracy of the technology prior to its implementation in the JV project so that there is no margin of doubt later. They added that the Government is keen to ensure that the technology on which so much of money is being spent does not turn out to be half-baked one and fully suits India's requirement, therefore a delay in the project's implementation is not unduly worrying it.
Owing to this, sources added, the detailed project report (DPR) of the proposed nuggets unit in Durgapur is taking some time and would be ready only by end of December 2013. This would mean that the project would take off only next year, though as per initial plans, work on it was to begin by this year itself.
Kobe's Minnesota-based nuggets plant is currently only operational by up to 75 per cent of its total capacity and this is the reason why the SAIl-JV project may get delayed. It is expected to reach full capacity soon, sources added, and by that time the DPR for the Durgapur JV too would be completed.
The nuggets plant in Durgapur, once it gets operationalised, would help in producing special grade steel in SAIl's existing Alloy Steels Plant there, with the help of the ITmK3 technology.
Meanwhile SAIl Chairman CS Verma, too, had recently said that the State-owned entity was going ahead with the JV and the environment assessment work for it is currently going on, which would take around six months to get completed.
last year in July when the pact for the SAIl-Kobe JV was inked, the Indian steel maker in a statement had said that “while SAIl will contribute land, iron ore and other engineering services for the project, Kobe steel will provide the technology for setting up the plant and its operation”.
A joint venture company called “SAIl-Kobe Iron India Pvt ltd” in which SAIl and Kobe Steel hold equal equity, has already been incorporated. The raw material for the joint venture would be supplied from SAIl's Gua mines in Jharkhand.
“The ITmK3 technology will also utilise dump iron ore fines, disposal of which is an environmental issue,” the statement had added.
ITmK3 technology has successfully replaced coal as an input material for iron making and is recognised for its low energy consumption and environment friendliness.