Australia’s Environmental Clean Technologies (ECT) has decided to end its relationship with PSU mining giant NMDC due to the latter’s “increasing lack of responsiveness”.

In January, BusinessLine had reported that ECT had threatened to pull out of the joint venture if NMDC continued to dither. It had warned its “Indian partners” that further delays would have “serious implications on ECT’s ability to continue with the project”.

The three-way joint venture of ECT, NMDC and another lignite and power PSU, NLC India, was formed to pilot a cheaper way of producing steel using the technology developed by ECT and NLC’s lignite. The agreement for the JV was signed over a year ago, but has been in limbo ever since, because NMDC’s board is yet to sign the binding ‘research collaboration agreement’.

In a recent press release, ECT spoke of NMDC’s “increasing lack of responsiveness” and “apparent lack of unwillingness”. However, ECT said, it continued to have a “strong and active relationship” with NLC, which would ship 20 tonnes of lignite to Australia for “high-value application testing”. ECT also recently developed technology for producing hydrogen from lignite; it wants to bring it into the ambit of the joint venture with NLC.

ECT’s ‘matmor’ for steel production technology uses wet, low-carbon and cheap lignite in the place of coking coal. Since lignite costs about a third of coking coal, the finished product, steel, is cheaper. ECT chose India because of the abundance of lignite here; it decided to hitch up with the government-owned companies because they own lignite and iron ore mines. The first-of-its-kind R&D project had also been scrutinised by the NITI Aayog.

ECT was to hold 49 per cent equity in the JV and the rest was to be divided equally between the two Indian partners. The JV was to put up a ₹150-crore pilot project at Neyveli with Indian funding and Australian technology. The intellectual property would be owned by the JV, which would then license the technology to Indian and overseas steel makers.

CAG’s negative remarks

BusinessLine ’s queries to NMDC received no response till the time of going to press. Incidentally, there is no mention of the joint venture in its ‘corporate presentation’ of May 29, though the company is a signatory to the JV agreement. This is NMDC’s second run-in with an Australian company. In 2011, NMDC had bought a 50 per cent stake in Legacy Iron Ore Ltd for ₹168.53 crore. In its recent report on the company, the Comptroller and Auditor General of India (CAG) observed that NMDC had made the investment despite the consultant appointed for conducting the evaluation study calling it a ‘negative net present value’ project.

Our Hyderabad bureau reports: The Donimalai iron ore mine in Bellary, Karnataka, which has been closed for over eight months, is set to resume operations following a directive of the Karnataka High Court.

NMDC had earlier approached the Karnataka government to facilitate the execution of the lease deed and resumption of operations at Donimalai.

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