Synopsis:
ArcelorMittal Nippon Steel India has taken control of a 16 million metric ton capacity iron ore terminal at Visakhapatnam Port from an Essar Group unit, reports Economic Times. The takeover follows the long-awaited security clearance from the Union government for a deal announced in 2022.
Article:
In a significant development for India's steel industry, ArcelorMittal Nippon Steel India has assumed control of the country's largest ore handling complex at Visakhapatnam Port. The 16 million metric ton capacity iron ore terminal was previously operated by a unit of Essar Group, and the takeover follows the receipt of long-pending security clearance from the Union government for a deal announced in 2022.
According to a government source, "AM/NS received security clearance in early March, after which we discharged the Essar unit as the promoter/operator of the terminal." The Visakhapatnam Port Authority also collected approximately Rs54 crores in dues from the Essar unit before allowing the change in the terminal's shareholding.
AM/NS India is a joint venture between ArcelorMittal and Nippon Steel, two of the world's leading steelmakers. The acquisition of the iron ore terminal is expected to strengthen the company's position in the Indian steel market and ensure a stable supply of raw materials for its operations.
Although the deal was announced in 2022, the acquiring entity cannot come on board until it receives security clearance from the government, as per Clause 11.2 of the concession agreement. This requirement is in place to ensure that the new shareholder meets the eligibility criteria set out by the port authority at the time of issuing the request for proposal for the project.
In addition to meeting the eligibility criteria, the new stakeholder must also obtain security clearance from the government. This process is crucial to ensure that the terminal's operations remain secure and in line with national interests.
The takeover of the iron ore terminal by AM/NS India is expected to bring significant benefits to the company and the Indian steel industry as a whole. With a capacity of 16 million metric tons, the terminal will enable AM/NS India to streamline its supply chain and reduce its dependence on external sources for raw materials.
Furthermore, the acquisition is likely to create new job opportunities and contribute to the economic growth of the region. The Visakhapatnam Port, one of India's major ports, plays a crucial role in the country's maritime trade, and the presence of a leading steelmaker like AM/NS India is expected to boost the port's competitiveness and attract more investments.
Conclusion:
The takeover of the 16 million metric ton capacity iron ore terminal at Visakhapatnam Port by ArcelorMittal Nippon Steel India marks a significant milestone for the Indian steel industry. The acquisition, which followed the receipt of security clearance from the Union government, is expected to strengthen AM/NS India's position in the market and ensure a stable supply of raw materials for its operations.
Source: STEELGURU
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