Sources close to the development said the facility would be a win-win proposition for both Steel Authority of India and KIOCL, formerly known as Kudremukh Iron Ore Company.
"The coke oven battery will help KIOCL to run its blast furnace viably on stand-alone basis and would act as a backward integration project. SAIL's Bhadrvati unit also needs coke," the source said.
Coking coal is converted into coke in ovens. The future of SAIL's loss-making Visvesvaraya Iron and Steel Plant at Bhadravati can change its prospects with better and assured availability of coke, a raw material for steel making.
The proposed shareholding of the project is yet to be arrived at. Ditto for the off-take agreement and details of estimated investment of Rs 425 crore.
The proposed unit was originally planned by KIOCL and accordingly, it has already obtained environmental clearance from the Ministry of Environment and Forest for establishment from Karnataka State Pollution Control Board.
However, KIOCL Board subsequently directed the company to explore the possibility for a possible tie-up to take up the project forward on joint venture basis in the best interest of both the firms.
"A draft MoU to be entered into between the two firms is under consideration by the two parties. The matter is likely to be resolved soon," he said.