ArcelorMittal Nippon Steel India (AM/NS India) has assumed control of a 16 million tonne (mt) capacity iron terminal at state-run Visakhapatnam Port from a unit of Essar Group, after the long-pending security clearance from the Union government was received for a deal announced in 2022.

AM/NS received security clearance in early March, after which the Essar unit was relieved of its duties as the promoter/operator of the terminal. The Visakhapatnam Port Authority also collected approximately Rs 540 million in dues from the Essar unit before allowing the change in the terminal?s shareholding.

The terminal, recognised as India?s largest ore handling complex, has been acquired by ArcelorMittal Nippon Steel India, a joint venture between ArcelorMittal and Nippon Steel, two of the world?s top steelmakers.

Despite the deal being announced in 2022, the acquiring entity was unable to assume control until it obtained security clearance from the government, as per Clause 11.2 of the concession agreement.

A change in shareholding in a public-private-partnership (PPP) terminal at a major port is contingent upon two conditions. Firstly, the new shareholder must meet the eligibility criteria stipulated by the port authority at the time of tender issuance for the project. Secondly, the new stakeholder must obtain security clearance from the government.

In 2022, AN/NS India acquired various port, power, and other logistics and infrastructure assets from the Essar Group for $2.05 billion (approximately Rs 165 billion) which are integral to the steel plant at Hazira, acquired under India?s bankruptcy law.

This acquisition included a 25 mt captive port alongside a 270 MW power plant at Hazira, adjacent to AM/NS India?s flagship steel plant, a 16 mt deep draft terminal at Visakhapatnam Port alongside an integrated conveyor connected to AM/NS India?s 8 mt iron ore pellet plant in the port city, a 12 mt deep-water jetty at Paradip Port in Odisha alongside a dedicated conveyor managing pellet shipments from AM/NS India?s Paradip pellet plant.

The deal also encompassed a 515 MW gas-based power plant, in addition to allied land suitable for AM/NS India?s expansion plans at Hazira. These assets are either captive or related to AM/NS India?s steelmaking and are expected to bolster the strategic integration of the Company?s manufacturing and logistics chain. This will ensure seamless connectivity and supply chain security for the movement of raw materials and finished goods between the steel maker?s manufacturing facilities in western, eastern, and southern India, as well as for exports, as stated by AM/NS upon announcing the deal.