UK's Stemcor in talks with Indian firms to sell its iron asset

UK's Stemcor, the world's largest independent steel trading company, is in talks with Indian steelmakers including Jindal Steel and Power, about the sale of its iron processing assets in the Indian state of Odisha.

The trading firm has come under pressure to raise funds since it was forced to ask lenders to freeze its repayments when it was unable to refinance an $850 million syndicated loan that was due to mature on May 7.

The privately-owned firm has put up for sale its wholly owned project Brahmani River Pellets Ltd, which includes a 4 million tonnes a year iron beneficiation plant in Barbil and a pellet plant complex in Jaipur, which are connected via a 220-kilometre underground slurry pipeline, sources said.

"The asset is openly for sale. They have spoken with almost every steel mill in the country about a possible takeover of the asset. They

also came to us but we have not taken any decision yet," V.R. Sharma, chief executive of the steel business of Indian firm Jindal Steel and Power said by telephone.

He declined to comment on any price involved and Stemcor declined to comment on the potential sale.

Other major steelmakers in India are Tata Steel, Steel Authority of India and JSW Steel.

Tata Steel declined to say whether it was in talks with Stemcor over a potential acquisition of the assets.

Steel Authority of India and JSW were not immediately available.

Stemcor's Indian beneficiation plant takes low grade iron ore fines from various local mines and refines them while the pellet plant, located near local steelmakers, converts low-grade iron fines into value-added pellets.

Iron ore is a key ingredient to produce steel and India is a main supplier of spot cargoes to China, the world's largest buyer of the metal.

Image: Jindal Steel and Power chairman Naveen Jindal