Efforts on to revive the embattled company

After a gap of nearly two-and-a-half years, KIOCL, which had been embattled since its mines were closed down in the Western Ghats, has started to export iron pellets. The first shipment of 50,000 tonnes of pellets was sent on a ship from the KIOCL-dedicated Berth 8 of the New Mangalore Port on Saturday.

Announcing this to reporters, Malay Chatterjee, Chairman-cum-Managing Director of KIOCL, said in all 3 lakh tonnes of pellets will be exported to China, through an intermediate London-based auction company, in the next three months.

“We are expecting around 162 dollars per tonne. As there is still demand for the Kudremukh pellet, the prices are around five dollars more than the prevalent international market rates,” he said, adding that the company would make in-roads in China and Japan where the pellets have found a favourable market.

Company revival

The announcement comes at a time when the economy is in need of earning foreign exchange, said Mr. Chatterjee. “We can attempt to get back the status of being a 100 per cent export-oriented unit,” he added.

Since the closure of its captive mines in 2006 in Kudremukh on the order of the Supreme Court which declared the area a national park, the mini-ratna status Public sector Unit has struggled to make use of its 3.5 million-tonnes-per-annum capacity pellet plant in the city.

Adding to their woes is the difficulties in logistics of bringing iron ore from mines in Chattisgarh as well as the Distance-Based Charge levied by the Railways that sees costs rising by more than Rs. 1,800 per tonne.

“In August 2011, the prices of the Kudremukh pellet were not competitive and there had been no export since,” said Mr. Chatterjee.

Captive mine

For the company to become competitive again in the international market, a captive mine was needed, he said. Among the options was the allocation of mine blocks in Karnataka: Chikkanayakahalli, which is estimated to have around 10 million tonnes of iron ore, and Ramanadurg, where the minimum estimate is around 30 million tonnes.

“The Chief Minister has been positive about this, and our application is in the final stages. The CM also suggested that KIOCL can get access to C-category (mines closed for severe violations) when it is allowed for auction,” said the CMD.

The company is in the process of dismantling equipment, which was sold for Rs. 227 crore to Annum Steel, at its closed mine; and is also in talks with the Tourism Department to convert the largely-abandoned Kudremukh Township set by the Bhadra river in the Western Ghats to an eco-tourism spot.

Plan to supply water to city

KIOCL, previously known as Kudremukh Iron Ore Corporation Ltd., is looking to ink a Memorandum of Understanding with the Mangalore City Corporation to supply the city with water drawn from its dam at the now-defunct mining site in Kudremukh.

The arrangement would see nearly 7.5 million litres of water per day (MLD) given to the city, free of cost, in exchange for treated water from the city that can be used at its plant, said KIOCL Chairman-cum-Managing Director Malay Chatterjee here on Saturday.

The additional water supply would compliment the 160 MLD of water being supplied by MCC to the city. Officials said the modalities of the MoU were being worked out.

More In: Mangaluru