Sequel to uncertainty over Bayyaram

As allotment of iron ore mines in Bayyaram and other parts of Telangana caught in the controversy over bifurcation of Andhra Pradesh, Rashtriya Ispat Nigam Limited is banking on operating mines in Rajasthan to meet part of its raw material requirement.

Even after a long time, there is not much progress over signing joint venture agreement with AP Mineral Development Corporation due to apparent reasons. The promise of allotment of iron ore mines in an area of 5,342 hectares in Bayyaram (Khammam), Guduru (Warangal) and Bheemadevarapalli (Karimnagar) has still remained on paper.

RINL, the corporate entity of Visakhapatnam Steel Plant, is in a massive expansion mode but it is facing severe cash crunch due to heavy amounts it is spending on sourcing raw material. The listing of the Navratna company has been delayed due to market slowdown and stiff resistance from the trade unions.

RINL, which has almost completed expansion from three to 6.3 million tonne at a cost of Rs.12,500 crore, needs 10 million tonne of iron more for producing at its full capacity. The production cost of RINL is the highest as it spends 72 per cent, while it is 50 per cent for SAIL and 39 for Tatas.

Majority stake

RINL has acquired a majority stake in Bird Group and made Orissa Mining Development Company its subsidiary company with the fond hope of getting mines in Barbil. Owing to controversy over illegal mining in Odisha, the clearances for renewal of mining leases are awaited.

RINL sources say the company will initially invest Rs. 2,500 crore to set up a beneficiation unit and a two million-tonne pellet plant in Bhilwara for value addition of the ore before using it at the Vizag Steel Plant.

The sources say the Rajasthan government has recommended the Ministry of Mines for allotment of another 4,866 hectares area of iron ore blocks in Jahajpur, which is close to Bhilwara. Both Bhilwara and Jahajpur blocks are estimated to be having 667 million tonne reserves.

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