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Under construction in India metallokombinat Nagarnaar can be privatized

6 December 2016

Recently, in the Indian press there was news about a possible change of the owner of the metallokombinat Nagarnaar. Iron ore company national Mineral Development Corporation actively engaged in the construction of a new enterprise in Indian state Chhattisgarh. The transaction may take place under the new government programme aimed at the sale of unprofitable enterprises. Conditions of the program allow the sale of both local and foreign enterprises.

Nagarnaar planned to invest in the construction of metallokombinat 200 billion rupees, which equates to 2,5 billion dollars. After completion of construction, power production should reach three million tons per year.

Today, the construction of the plant is going according to plan. As planned earlier, the construction should be finished in the middle of next year. Startup enterprises must address several strategic challenges. In addition to the company’s expansion, construction — a step towards vertical integration and increasing of the added value. Therefore, the motive of the sale of the unfinished businesses that remain unclear.

Anyway, the news has aroused great interest in the circles of potential buyers. The purchase of the plant can be a very profitable investment. The new company has a favorable location. It is located near mines, which is developing Mineral Development Corporation. In India’s realities, this fact becomes especially important. Another advantage is that the issue of allotment of plot is fully resolved. Because, recently, the Tata Steel company abandoned one of its projects in India. Due to the inability to resolve the land issue, while the company suffered significant losses.

Now Tata Steel is one of the main contenders for the purchase of metallokombinat Nagarnaar. However, the Korean company Posco is also of great interest to the company. Koreans since 2005, trying to gain a foothold in the Indian market. But attempts by success have not crowned, because of the same problems with the ground. Besides, Posco has not received a license for mining in India.

Steel from India rather quickly conquering the global market, and industry in the country is gaining momentum. It attracts investors from all over the world.

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