The reason for the lack of selling over the last 6 months is...

The reason for the lack of selling over the last 6 months is obvious.

Expectations are at fever pitch that the proposal will be approved by NMDC’s board very soon.  The approval has been delayed time and time again but with each delay ECT has been moving up the ranks to get it through. And now we can’t go to any higher level than where we are now.

We will also get news very soon on the feasibility study for the La Trobe Valley project which management flagged in announcements late last year.

The Chairman Managing Director (CMD) Mr Baijendra Kumar confirmed last week that he’s fast tracking approval for end of this month.  Whether you believe this timeline or not is one thing, but this is still an important point for two reasons. First, I understand ECT has been predominantly engaging the sponsoring director (Mr NK Nanda) to get this over the line and not the CMD Baijendra Kumar. And second, it was Mr Baijendra Kumar’s appointment to NMDC a while back that put the brakes approval process (so he could get up to speed with the project).

Remember, we have had director level input from NMDC all the way through, so risk of rejection is very low. NLC has also joined ECT in pushing the highest level of NMDC to approve the project.

NMDC has spoken proudly of the MOU signed back in May, featuring it in a number of presentations as potentially their largest R&D project of all time.

The case for the technology for NMDC (and NLC) is compelling.  Even more so in recent months as tight iron ore supplies are pushing up steel plant supply costs.  It’s all over the news, in the last couple of weeks especially. Coupled with the rapid growth in steel demand/output, NMDC’s foray into the sector,  policy directives to move away from expensive coking coal imports, the environmental push, build up in low grade ores and mill scale inventories, this makes the case for something like Matmor extremely compelling.

The project's feasibility study was done a long time ago, and in collaboration with NLC and NMDC. The financial metrics making the case for the tech have only gotten better since.

The stars have lined up perfectly for NMDC and ECT. I believe the risk of board rejection is low for reasons above. Once board approves the project, it’s a huge and immediate win for NMDC and the Ministry of Steel.  Like I’ve said before, this will not get done quietly, I think the Indian partners will want a lot of publicity around how an international collaboration like this benefits India as a form of encouragement for new engagements.