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Rashtriya Ispat asks NMDC to join Rs 2,000-cr STML project

NEW DELHI: With BHELBSE -4.38 % not showing willingness to be a partner inRashtriya Ispat Nigam's high-end seamless tube mill project, NMDCBSE -0.22 % has been asked to replace the power equipment maker in the Rs 2,000 crore venture.

"BHEL is not showing keenness to join in the project as our joint venture partner. So, we have requested NMDC to join in seamless tube mill (STML) project, to be set up inside our 
Vizag plant," RINL's Finance Director P Madhusudan told PTI.

The reasons for BHEL's reluctance could not be immediately gathered.

Madhusudan, also CMD-designate for the Vizag-based firm, said MOIL, another PSU under the Steel Ministry, is already a partner in the project, which as per the previous plan was projected to have an annual production capacity of four lakh tonnes per annum with Rs 2,000 crore investment.

"We have requested the 
Steel Ministry to hold a joint meeting with RINL, NMDC and MOIL for deciding the modalities to take the project forward," he said.

The shareholding pattern of the venture is likely to be finalised at the proposed meeting. Since the mill would be located inside RINL's Vizag facility, the steel producer may seek a majority stake in the venture, sources said.

Seamless tubes find application in energy, oil & gas and water sectors, among others. After meeting local requirements, products from the project would be exported to destinations such as 
the Middle East.

The growing domestic market for seamless tubes has the potential to increase with the government's thrust on creating infrastructure.

Once the joint venture agreement is signed, the entity would start tendering for the plant and machinery. It might take two to two-and-a-half years from the start of tendering for the plant to become operational.