Kobe’s Minnesota success key to NMDC alliance

National Mineral Development Corporation (NMDC), India’s biggest iron ore miner, is keeping an eagle’s eye on Japanese major Kobe Steel’s ITMk3 technology-based maiden steel plant in Minnesota in the United States before firming up its own joint venture with Kobe in India.

The company had signed a memorandum of understanding (MoU) with Kobe in July 2010 to set up a 0.5 million iron nugget plant in Andhra Pradesh using the latter’s patented ITMk3 technology.

“Our MoU with Kobe said we would consider setting up a nugget plant using its technology but we do not want to go fast on it,” said Rana Som, chairman and managing director, NMDC.

He said the company would first wait and watch how the US plant is running.

The Minessota plant, a joint venture with Steel Dynamics of US, has a capacity of 0.5 million tonne.

Som said besides technology, there are two more issues that needs to be addressed before NMDC finally decides to go ahead with the plant. First, the cost dynamics and how different it is compared with India’s nugget manufacturing technology; and second, what grade of iron ore could be used for this. “If it uses high-grade iron ore then there is no purpose of using this technology,” he said.

Under ITMk3, instead of iron ore lumps, iron ore fines or dust is used for the production of steel.

These fines, which get wasted as dust lying on the mouth of the mines, are heated to form iron nuggets which are then fed to a steel plant to produce steel.

The steel production method largely followed in India is converting iron ore lumps to form sponge iron, which has 91-92% Fe content, where as nuggets could have an Fe content of as high as 97%, said an industry expert.

Som said while the company is still studying the dynamics of a nugget plant, NMDC has already identified two sites in South India and one of them would be finalised for the plant.