With raw material insecurity turning into a big hurdle for its future, the Rashtriya Ispat Nigam Limited (RINL), corporate entity of the Visakhapatnam Steel Plant, has stepped up its efforts for allotment of captive mines.
Being the only major steel producer without captive mines, the RINL spends nearly 60 to 70 per cent of its production cost on raw material. With industrial slump still casting its shadow on the domestic market, RINL is expected to incur net loss during the first quarter also.
Central nod awaited
Following sustained pressure from the RINL management and its union leaders, the Steel Ministry recently asked the Coal Ministry to allot some blocks for the city-headquartered Navratna company.
For getting iron ore, the RINL is eagerly awaiting Central clearance for going ahead with a joint venture proposal with the AP Mineral Development Corporation to explore mining blocks in Kukunoor of West Godavari district.
According to RINL sources, estimates made in Kukunoor area long ago had revealed deposits to the tune of 20 to 30 million tonnes of iron ore of 63 per cent Fe.
The RINL is ramping up its production capacity from three million to 6.30 million tonnes after completion of expansion at a cost of Rs.12,500 crore. It needs 10 million tonnes of iron ore to produce 6.30 million tonnes of steel.
The company is also spending Rs.5,000 crore to produce one million additionally by capacity augmentation and modernisation of blast furnaces and other critical equipment.
This is expected to be completed by 2016-17.
Mineral exploration survey
The RINL is conducting a mineral exploration survey by the Mineral Exploration Corporation Limited in Bhilwara region of Rajasthan where it has been allotted low-grade iron ore.
After picking up majority equity in Eastern Investments Limited through a payment of Rs.360.30 crore in 2010, the RINL had pinned high hopes on getting mines in Odisha.
The EIL has strategic control over the Orissa Mining Development Corporation.
“We have legitimate right to get captive mines in Odisha. The Centre should not show step-motherly treatment to RINL and clear legal hurdles in getting iron ore through OMDC at the earliest to save production cost. At the same time, the State Government should bring pressure on Centre to clear allotment of Kukunoor mines,” Visakha Steel Employees’ Congress (recognised union of VSP) general secretary Mantri Rajasekhar said.
The RINL has a long-term agreement with the National Mineral Development Corporation for supply of iron ore from Bailadila in Chhattisgarh.
