Severstal hopes to sort out differences on JV with NMDC

Russian steel producer Severstal today said it hopes to sort out differences on shareholding issue for the proposed steel-making joint venture with NMDC that involves Rs 16,000 crore investment in Karnataka.

"We have several topics to discuss like the shareholding pattern. We are discussing. We still have the hope to work together," Severstal CEO Alexy Mordashov told reporters at the two-day event of the World Steel Association (WSA) here.

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Meanwhile, Indian Steel Minister Beni Prasad Verma said the joint venture could proceed only if the foreign party agrees to settle at 50 percent stake.
    
"We can give them 50 percent stake. Also, the Chairman of the venture should be from our side, while the Managing Director can be from their side," Verma said.
    
NMDC had inked a MoU with Russia's second largest steel maker Severstal in late 2010 for a 2 mtpa plant initially in Karnataka with around Rs 16,000 crore investments.
    
However, differences on shareholding issue continued to come in the way for the formation of the joint venture. While Severstal was keen on getting the majority control, the Indian side, on the other hand, continued to refuse the demand.
    
Mordashov, who is set to take over as the WSA Chairman from October 12, said, "As a part of the successful strategy in India, it is important to have a reliable partner especially because of complications in Indian business
environment."
    
He said Severstal had not walked away from the proposed venture so far because it wanted to discuss and reach out to a mutually beneficial solution.
    
Severstal would supply coal, a key raw material for the manufacturing of steel, for the proposed plant, if the deal with NMDC comes through.