Date | December 25, 2016:
The long-awaited dream of the Rashtriya Ispat Nigam Limited of having captive iron ore mines may become a reality with the Ministry of Steel indicating recently that a block in Bailadilla of Chhattisgarh would be allotted to the navratna company.
If not fully, it would give it a breather to some extent in providing raw material security. The RINL, corporate entity of the Visakhapatnam Steel Plant, is facing a Herculean task to survive in a highly competitive market due to high production cost.
Sources told The Hindu that while the RINL spends around 60 per cent of production cost on sourcing raw material, it is just 40 per cent for other major steelmakers including SAIL, Jindal and Tata Steel as they are blessed with captive mines.
“Union Steel Secretary Aruna Sharma gave a categoric assurance that by March 31, we will get an ore block in Chhattsigarh,” said Visakha Steel Employees’ Congress (recognised union) general secretary Mantri Rajasekhar.
The RINL is meeting its iron ore requirements by sourcing it from the National Mineral Development Corporation with which it has a long-term agreement. Bastar district has many iron ore mines owned by the NMDC.
The RINL needs nearly 1.5 tonne ore to produce one million tonnes of steel. The requirement will go up as it is expected to add another million tonnes achieving a production capacity of 7.3 million tonnes in a year.
The capacity addition is made possible by undertaking capital repairs of the blast furnaces and other vital facilities with an investment of Rs. 5,000 crore. Earlier, it expanded capacity from three million tonne to 6.3 million tonne by spending Rs. 16,500 crore.
The proposal to float a special purpose vehicle with the AP Mineral Development Corporation to undertake iron ore mining in Kukunoor in West Godavari district is pending approval from the Ministry of Mines.
The RINL’s bid to lay hands over 220 million tonnes of iron ore reserves in six blocks mainly at Barbil in Odisha has not evoked any response so far even after it paid Rs.360.60 crore to the Eastern Investments Limited. The EIL has strategic control over the Orissa Mining Development Company, which has automatically shifted to the RINL. However, due to court disputes, the RINL is yet to source the ore.
The plan to get mines at Bayyaram in Khammam had fallen flat with the carving out of Telangana State in 2014.
(Source: http://www.thehindu.com/)