RINL’s raw material woes may end soon

Due to our united struggle, we could stop visits of merchant bankers for valuation of RINL thereby stopping issuance of Expression of Interest (EoI) for buying the company lock, stock and barrel - Ch Narsinga Rao, CITU State general secretary tells Bizz Buzz

Visakhapatnam: Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant (VSP) which is facing raw material insecurity and severe working capital crunch may have better days ahead with the Ministry of Steel reportedly evincing interest to convince National Mineral Development Corporation (NMDC) to restore normal supply of iron ore from its mines in Chattisgarh.

Earlier, RINL which runs a steel plant here with an annual capacity of 7.3 million tonnes had pressed panic buttons with the NMDC management telling point blank that it is unable to supply iron ore from Kirandul and Bacheli mines in Bastar district of Chhattisgarh as per long-term understanding due to fall in production and instead advised it to source its requirement from its mines in Karnataka. The decision had forced RINL to slash its production drastically.

Informed sources said a sustained campaign by the management, elected representatives, unions and officers’ association of VSP has led to convince NMDC to extend preferential treatment to RINL is paying off. Both RINL and NMDC are under the Ministry of Steel. Sourcing iron ore from Chhattisgarh is cheaper than getting it from Karnataka because of the distance factor.

To overcome resource crunch, RINL is progressing in its talks in giving 2000 acres on lease on payment of around Rs 1400 crore to NMDC to set up a pellet plant as part of land monetisation and a financial aid from Tata International in exchange of its finished goods.

Now RINL management is relieved of its worries with regard to raw material though NMDC presently is unable to supply due to dislocation in freight movement following landslide on the KK railway route. Kottavalasa-Kirandul railway line, which is the lifeline for East Coast Railway ferries iron ore from Bailadila coal blocks of NMDC in Chhattisgarh.

The development also assumes significance in the backdrop of the announcement by BJP MP and national spokesman GVL Narasimha Rao that the Centre has decided to put on hold the decision to privatise RINL.

The Cabinet Committee on Economic Affairs in its decision in January 2021 had cleared the proposal for 100 per cent sale of RINL, its subsidiaries and joint ventures by way of privatisation.

“Due to our united struggle, we could stop visits of merchant bankers for valuation of RINL thereby stopping issuance of Expression of Interest (EoI) for buying the company lock, stock and barrel,” CITU State general secretary Ch Narsinga Rao, told Bizz Buzz.

CPI (M) general secretary Sitaram Yechury, who addressed a huge rally to express solidarity with the agitating employees of RINL here on Thursday last, said their fight will continue till the Centre reversed its decision on privatisation of RINL.VSP had to incur a capital expenditure of about Rs 16,300 crore.

VSP recognised union leader and AITUC national vice-president D Adinarayana, who is now camping in Delhi, told this correspondent that there are positive indications that the NMDC management has agreed to restore normal supply of iron ore from Chhattisgarh. Stating that retaining it in the public sector and offering raw material security and working capital grants by the government are the only alternatives to help achieve a turnaround, he said that RINL’s liabilities have already crossed the halfway mark of total asset value of Rs 50,000 crore.

Visakha Steel Employees’ Congress additional general secretary Neerukonda Ramachandra Rao said as a contingency plan, RINL is successful in getting assurance from Steel Authority of India Limited (SAIL) and Kudremukh Iron Ore Company Ltd (KIOCL) to get iron ore till NMDC revives normal supply.