Captive Mines Key For RINL’s Revival

Explore long-term supply agreements with NMDC or other miners at concessional rates.Rationalisation of workforce costs may be required to cut down high employee costs affecting profitability - L Muralidharan, ED, Kakinada Gateway Port, tells Bizz Buzz

Visakhapatnam: Strongly mooting allotment of captive mines for RINL, L Muralidharan, port evangelist, and Executive Directorat Kakinada Gateway Port Ltd (KGPL) on Sunday underscored the urgent and growing need to secure captive iron ore supply to avoid high dependency on external suppliers entailing heavy input costs.

He told Bizz Buzz that the need now is to negotiate with the authorities concerned to allocate captive iron ore mines to RINL on a priority and explore long-term supply agreements with NMDC or other miners at concessional rates. He said investment in beneficiation and pelletization plants near mining locations should be explored to reduce raw material costs

As part of a multi-pronged strategy, he also felt that rationalisation of workforce costs may be required to cut down high employee costs significantly affecting profitability. He also wanted upskilling of employees to redeploy them in high-value operational areas and digitisation and automation processes and improvement in techno-economic parameters to improve productivity in view of competition from others. He said improvement in operational efficiency is a prerequisite to enhance profitability.

As part of turnaround strategy, Muralidharan mooted upgrading blast furnaces and adopting energy-efficient technologies, reduction in fuel and power consumption by implementing modern practices like waste heat recovery, strengthening logistics to leverage the port-based location for cheaper material handling and diversifying of product portfolio.

To avoid heavy reliance on bulk steel products with thin margins, he strongly advocated focus on high-margin value-added steel products like specialty steel for automotive, construction, and defense sectors, exploration of export markets and niche segments to increase revenue streams and financial restructuring.

He said there is a need to restructure high-interest loans through government intervention or debt-to-equity swaps. Consider monetising non-core assets to reduce debt, leveraging Rs11,440-crore aid for critical operational upgrades rather than only debt servicing and entering strategic partnerships.

The port evangelist said RINL has to collaborate with private sector players or foreign investors for technology sharing and operational expertise, evaluate public-private partnership (PPP) models to infuse capital and improve efficiency and strengthen governance and accountability. He called for appointing a professional, independent management team with a clear revival roadmap, regular performance audits to ensure transparency and accountability, policy advocacy and government support.

He wanted policies to ensure RINL receives parity with other integrated steel plants in mining and exports and support for infrastructure development to reduce logistics costs with short and long-term strategies to stabilise operations, reduce losses and improve cashflows.