Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant (VSP) can breathe it easy with the Centre’s decision to allot it a coal mine in Jharkhand, though the long-pending demand to get captive iron ore mines to achieve raw material security is yet to be fulfilled.
The India’s first shore-based steel plant needs 1.6 kg of iron ore to produce a kg of steel. Similarly, for producing a kg of steel, it needs 550 grams of coal. In the absence of captive mines, the PSU still depends on domestic and overseas supply of the raw material, which leads to expensive production cost among the major steelmakers in the country.
The Ministry of Coal on Saturday announced the allotment of two coal mines at Rohne and Rabodih respectively to the National Mineral Development Corporation (NMDC) and the RINL. The two mines can generate 10 million tonne per annum. The NMDC is on verge of completing the work on commissioning a three million tonne integrated steel plant at Nagarnar in Bastar district of Chhattisgarh. The NMDC, which is also under the purview of the Ministry of Steel, has a long-term agreement with the RINL for supply of iron ore from its Bailadilla mines in Chhattisgarh.
‘Dependence on imports to go down’
“The decision to allot coal block at Robodih will reduce the dependence of RINL on the imports. According to the Ministry of Coal, the two mines in their lifetime will generate around ₹7,000 crore revenue for the Jharkhand Government, besides royalties and other applicable taxes. Both the NMDC and the RINL will establish their washing units for cleaning the coal,” an official of RINL told The Hindu.
The RINL’s dream to lay hand over the iron mines in Odisha has been shattered even as it invested ₹361 crore in the Bird Group of Companies in 2010 to achieve a strategic control over the Orissa Minerals Development Company (OMDC), which has coal blocks in Keonjhar with a reserve of 200 million tonne. It is facing a rough weather due to cases pending in Supreme Court over the payment of penalties for its alleged involvement in unauthorised mining by the OMDC.
Joint venture
The RINL’s plan to enter into a joint venture with the Andhra Pradesh Mining Development Corporation (APMDC) to explore low-grade iron ore in an estimated 900 hectares at Kukunoor of West Godavari district is awaiting clearance by the Niti Aayog and the Ministry of Mines.
