Reports indicate that state-run KIOCL and Steel Authority of India (SAIL) would jointly set up a coke oven plant, which converts coking coal into coke for use in the steel mills, at Mangalore.
Both the companies are expected to begin ground work for the project in the next few months after signing an equal joint venture agreement.
The proposed coke oven plant is expected to have a capacity of 3 lakh tonne a year. It is learnt that the scope of the agreement would also include the setting up of a 25 mw power plant. The investment on both the projects is expected to be Rs 500 crore.
The companies may fund the proposed investment in 2:1 debt-equity ratio and both SAIL and KIOCL will have the off-take right in equal proportion, reports indicate.
While KIOCL may sell its share of the finished product in the open market, SAIL may use its share for captive purposes.
In another 18 months, the proposed coke oven plant is expected to be commissioned. State-run miner KIOCL, which was formerly known as Kudremukh Iron Ore Company, is spearheading the venture. All the necessary environmental clearances are in place.
Coking coal is converted into coke for making steel as the raw material cannot be directly used in blast furnaces.
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