Manganese Ore India Limited (MOIL) is planning to forge a three-way joint venture with Steel Authority of India Limited (SAIL) and Rashtriya Ispat Nigam Limited (RINL) to set up a ferro alloys plant at an investment of over Rs600 crore at Bhilai in neighbouring Chhattisgarh state.

Ferro alloys are used in steelmaking to strengthen the metal. As SAIL and RINL have been major consumers of MOIL, earlier there was a plan to have two plants close to these PSU units at Bhilai and Bobbili respectively. The arrangement planned sometime in 2008 could not be implemented till date. As a result, recently the plans were reworked to set up a single unit at Bhilai.

"Originally, there were plans to strike a separate JV with SAIL and RINL, with a plant each at Bhilai and Bobbili in Andhra Pradesh. The Andhra plant could not take off due to the power crisis in the state. At the same time, suitable bids did not come in for the Bhilai venture. Now, it has been finally decided to have a common plant at Bhilai, where SAIL has its unit," said a source in the ministry of steel.

The plant will have a capacity of 1,50,000 tonnes per annum. This will be advantageous to both MOIL and the steel makers. The former will get an assured market while the latter will get an assured supply of ferro-alloys an essential ingredient in steel making, said a source.

Earlier, MOIL planned to have 50% stake in each of the JVs. Now, the modalities are still being worked out, but a part of the project will be funded with debt, said the source.

MOIL, which declared its results a couple of days ago, has recommended a final dividend of 35% leading to a payout of Rs58.80 crore. This is over and above the special dividend of 40% declared in February as a measure to avoid another round of disinvestment. This takes the total dividend payout to Rs126 crore in 2013-14, which is 36% higher than last year.

However, at the same time, production of manganese came down marginally to 11.35 lakh tonnes for the year 2013-14 as against 11.39 lakh tonnes in the previous year. Despite the fall in production, MOIL has been able to maintain a growth in turnover due to the pricing policy.

The company also plans to start geophysical studies in an area of 597 hectares of land in Nagpur and Bhandara districts to explore fresh manganese deposits.

• [Editor:Sophie]