A JV between Sical Logistics Limited and MMTC Limited, which built India's biggest iron ore loading terminal with an investment of INR 500 crore at union government controlled Ennore port in Tamil Nadu, is seeking to handle other cargo.
It has applied for the port's permission to do so after a Supreme Court ban on mining of the key steel making commodity in Karnataka’s Bellary Hospet region caused exports to dry up, rendering the facility non functional.
The iron ore terminal at Ennore Port, with an annual capacity of 12 million tonnes, was inaugurated in January by shipping minister G.K. Vasan, but is yet to start commercial operations. The terminal is totally dependent on the commodity originating from the Bellary Hospet belt for operations.
Mr PK Das, a chief general manager at state run commodity trader MMTC, said that "We are looking at alternatives including handling other commodities such as coal and cars for the time being till export of iron ore resumes."
Sical Iron Ore Terminals Limited is a JV firm formed by Sical Logistics Limited and MMTC Limited to develop and operate the new terminal for 30 years. Sical Logistics has a 74% stake while the rest is held by MMTC.
Mr Das said that "We are in discussions with Ennore port regarding this emphasizing that the venture was looking at handling other cargo only as an interim measure to keep the terminal running. We are not able to commission the terminal because of the ban on mining and export of iron ore."
According to the shareholder agreement between Sical and MMTC, apart from holding a 26% stake in the JV terminal operating company, MMTC has also committed to support the new terminal as a customer by shipping at least 3 million tonnes of iron ore a year through the Ennore facility.
The Sical MMTC partnership won the contract in a public tender in 2006 by agreeing to share 52% of annual revenue with the port. Sical MMTC is contractually bound to pay INR 2.5 crore to Ennore port as revenue share in the first year of operations with this rising 5% every year thereafter. Sical Logistics is now 57.08% owned by Tanglin Retail Realty Developments Pvt Limited.
(Sourced from www.livemint.com)
