The investment made by Rashtriya Ispat Nigam Limited in 2010 to own large deposit of iron ore mines in Odisha by picking up strategic control over Eastern Investments Ltd has failed to yield the desired result so far.
It has failed in easing raw material security to RINL and also given sleepless nights to the RINL management as the Supreme Court has issued orders for payment of huge penalty for indulging in unauthorised mining, which the Vizag-headquartered company says had happened before its investment in EIL.
EIL, a company belonging to Bird Group of Companies, had control over Orissa Minerals Development Company (OMDC), which has coal blocks in Keonjhar area with reserves of 200 million tonne.
To get control over OMDC, RINL, the corporate entity of Visakhapatnam Steel Plant, had invested ₹361 crore. According to Keonjhar Mining Workers’ Union, the Supreme Court has imposed a penalty of ₹1,470 crore on OMDC, which RINL has told to pay with a penalty of 14% before the deadline set by it.
Huge burden
During a chat with The Hindu , Steel Workers’ Union of India general secretary and former MP Tapan Sen said the decision to invest ₹361 crore had been thrust on RINL management. “The end-result is RINL faces a huge burden of paying the salaries to 250-odd employees and attend to court case as well as try to convince the Odisha government not tjo cancel the mining leases,” he said.
Mr. Sen said an iron ore per tonne which would have cost ₹300 per tonne if RINL had captive mines is now incurring an expenditure of ₹3,000 to ₹4,000 per tonne by sourcing it from NMDC and other agencies.
He said that though during UPA-I, Steel Minister Ram Vilas Paswan had mooted the merger of RINL with Steel Authority of India Ltd (SAIL), it was not considered due to some ‘vested interests’ in Andhra Pradesh.
However, he admitted that successive governments at Centre and undivided Andhra Pradesh had deliberately ignored the demand for captive mines to RINL.
Published - December 20, 2018 08:41 am IST
