Rashtriya Ispat Nigam Ltd. (RINL) is in talks with NMDC as well some Odisha government companies for creation of a special purpose vehicle (SPV), which will set up an ultra mega steel plant in the State.
RINL Chairman-cum-Managing Director P. Madhusudan said that the concept of setting up an ultra mega steel plant in mineral rich State through SPVs was being explored. He said there could be SPVs for steel and mining.
“Rounds of discussions are now being held,” he told journalists after addressing Merchants Chamber of Commerce. The Odisha government entities include its mining corporation and its industry promotion agency.
He also said talks were being held with the Rajasthan government for an iron ore mining project at Banera tehsil of Bhilwara district, where a 200 million tonne reserve of low grade iron ore deposits are located.
It may be mentioned that RINL does not have any captive sources of two key raw materials — iron ore and coking coal.
He said even as it pursued these initiatives, it had undertaken a repair and upgrade of an existing blast furnace, which would augment capacity by one million tonne taken together with the expanded capacity of 6.3 million tonnes, to 7.3 million tonnes by March 2017.
“Given our huge land-bank, we are planning to gradually ramp up capacity to 20 million tonnes within the next two decades,” the CMD said.
On prospects of an IPO for RINL, he said this was not for the company to decide. But the fact was the company had a favourable debt equity ratio and was not looking for an additional capital. The company spent Rs.12,000 crore on its expansion of which Rs.2,500 crore was debt.
Earlier talking on the Indian steel industry, he said although the industry was going through a ‘pause’, India was poised to become the world’s second largest producer by 2020.
Admitting that there were challenges on the way, he remarked “but this will not happen on its own.” He said there were problems about land availability, paucity of infrastructure and lack of sufficient manufacturing capacity besides skill gaps.
On the issue of import from China, he said the industry was looking to the government for some recast of the import duty structure. However, some MCC members clamoured for increased efficiencies by Indian firms, saying that changed duty structure will push up input costs for the MSME sector eventually affecting the consumer.
