Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant, is making all-out efforts to secure iron ore linkages to meet its raw material requirement after increasing its production capacity beyond 6.3 million tonnes per annum.
As part of two-pronged strategy, it is in the process of picking up majority stake through Eastern Investment Limited in Orissa Mineral Development Corporation (OMDC) and Bisra Stone Lime Company (BSLC), both belonging to Bird Group of Companies.
There is also a proposal by Ministry of Steel to merge Neelachal Ispat Nigam Limited (NINL) with RINL.
RINL Chairman and Managing Director P.K. Bishnoi told The Hindu in an interview on Monday that the stage-I and II expansion of VSP would be completed respectively by March and September 2010 to increase the capacity to 6.3 million tonnes per annum.
After the expansion, the iron ore requirement will be 10 million tonnes.
At present, it gets iron ore from Bailadilla mines through Kothavalasa-Kirandul railway line by having long-term agreement with National Mineral Development Corporation.
Mr. Bishnoi said that to many an exigency in the event of disruption in supplies from Bailadilla, RINL was signing agreements to get small supplies from SAIL from its Gua mines in Jharkhand.
There is also effort to enter into joint venture with State Mineral Development Corporations of Karnataka, Jharkhand and Orissa to increase RINL’s raw material security.
He said the Centre was considering RINL to become a strategic partner in OMDC and BSLC through Eastern Investment Limited to have greater raw material security.
BSLC has about 400 million tonnes of limestone reserves and 300 million tonnes of dolomites – both useful for iron, steel and cement making. OMDC owns huge iron ore mines. On merger of NINL with RINL, Mr. Bishnoi said the Ministry of Steel was actively considering the proposal.
Mineral and Metal Trading Corporation has substantial holding in NINL, which was earlier proposed for merger with SAIL.
Now the MMTC holding might be transferred to RINL.
RINL recently entered into a joint venture with Manganese Ore India Limited to set up a ferro silicon factory at Bobbili. To meet coking coal requirement, a Special Purpose Vehicle has been floated with SAIL, Coal India Limited, NMDC and NTPC.
To a question, he said RINL being a zero debt company was entitled to raise a debt of Rs.5,000 crores.
He parried a question on whether they would go for an IPO.