With getting iron ore from the mines belonging to Orissa Minerals Development Company remaining a distant dream, Rashtriya Ispat Nigam Limited (RINL) has moved forward to allot a site for establishing a pellet plant adjacent to Visakhapatnam Steel Plant (VSP) to meet part of its raw material requirement.
MoU signed
The pellet plant will be set up by RINL, the corporate entity of VSP and Kudremukh Iron Ore Company Limited (KIOL). Both the companies are under the Union Ministry of Steel and an MoU to this effect was signed early this year in Mangalore.
RINL invested ₹361 crore in 2010 to pick up strategic control over Eastern Investments Limited (EIL), part of Bird Group of Companies, to make the OMDC its subsidiary. EIL had majority stake in the OMDC. Due to litigations over mining leases in Odisha and the Supreme Court order for payment of heavy penalty over mining beyond the permitted area in the past, sourcing iron ore from Odisha looks remote in the near future. It has been agreed that the joint venture will produce pellets by using iron ore fines. The iron ore will be brought here either from Bailadila in Bastar district of Chhattisgarh or Bellary in Karnataka. When RINL gets pellets, it will help meet a part of its requirement of three blast furnaces. The plant will start with a production of 1.2 million tonne per annum. It will be increased in the next phase.
Clearance awaited
The trade unions of RINL have sought allotment of iron ore mines in Prakasam district. A government survey has confirmed low-grade deposits worth 100 million tonne. The company has already signed MoU with the AP Mineral Development Corporation to explore iron ore mining in Kukunoor mines in West Godavari district for which clearances from the Government of India are awaited.
The production cost of RINL is very high when compared to other major steel plants like Jindal, SAIL and TISCO as it does not have captive mines. The demand for allotment of captive mines has remained unfilled for a long time.