Both the corporations had signed an MoU in July 2006 to form a joint venture company that would benefit local steel companies in Chhattisgarh who have been transporting iron ore from Orissa to meet their requirement for raw material.

According to Chhatisgarh chief secretary Shivraj Singh, "The state government has asked the corporations to constitute the joint venture company by June (this year)".

NMDC manages four projects at the Bailadila mines that contain world-class iron ore, which will be supplied to the local steel industries to meet its raw material demands. The iron ore mined by the joint venture company in Bailadila would be supplied as per the clauses mentioned in the agreement. The state government will recommend mining lease of deposit 13 of Bailadila iron ore mine for the joint venture company.

If either of the corporations or both jointly set up a steel plant in the tribal dominated Bastar region, the company will supply iron ore to the plant on a priority basis. The joint venture company will then supply raw material to the steel plants across the state and the remaining iron ore, if any, will be transported to other states.

NMDC had been exporting the iron ore mines, which the state government had raised objection earlier for selling the rich mineral abroad stating that it was not in the interest of the state and country that got only royalty.