RINL Revival Hopes Rise As BF-1 Starts Production

Visakhapatnam: After hogging the limelight for certain unpleasant developments in the recent past, now there is an encouraging development to bring cheers among the employees of Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant (VSP).

Following improvement in raw material availability, the management revived the production at Blast Furnace-1 (BF-1) after several days.

The closure of two BFs among three had fuelled speculation that the plant, which was set up after ‘Visakha Ukku Andhrula Hakku’ agitation, is on verge of closure to pave the way for its privatisation for a song.

Privatisation talk has been doing the rounds ever since the Cabinet Committee on Economic Affairs took an in-principle decision in January, 2021 for strategic disinvestment by way of 100 per cent privatisation of RINL, its joint ventures and subsidiaries.

RINL top officials took part in the lighting ceremony to mark commencement of production by BF-1 on Monday to revive hot metal production. There is also talk that the company may revive the third BF to restore normalcy in production. The plant had to make a Capex of around Rs16,300 crore to increase its installed capacity from 3 million tonnes to 7.3 million tonnes. Raw material insecurity had worsened its working capital crisis, partly due to nearly 56-day long lightning strike by the Adani Gangavaram Port Limited (AGPL) workers and depletion in buffer stock of imported coal from Australia and other countries despite having a long-term agreement with NMDC to source iron ore from its Bailadilla mines in Chattisgarh.

RINL is the only major steel producer without captive iron ore and coal mines. Sources in RINL said as against hot metal production of 20,000 tonnes per day, the BF-1 where lightning was done will start producing around 7,000 tonnes per day after some time as per the normal practice. Any furnace needs time for stabilisation in production after shutdown.

At present, RINL’s debt burden and losses incurred due to various factors has crossed Rs.20,000 crore, sparking fears among the trade unions that the company’s privatisation is imminent. However, Union Steel Minister HD Kumaraswamy categorically ruled out privatisation in a recent posting on X. He said they are in the process of consulting Prime Minister Narendra Modi to strengthen and revive RINL.

There has been buzz that SAIL might acquire RINL or the company’s revival will be made by considering capital restructuring, declaring moratorium on payment of interests and loans and downsizing the employees’ strength under the mentorship of SAIL for some time. Officials of RINL as well as the mandarins in the Ministry of Steel are tightlipped over the speculation.

Leading a protest at Ukkunagaram, Visakha Steel Employees’ Congress (VSEC) president Neerukonda Ramachandra Rao said the Government of India had funded Rs4,890 crore for establishment of the steel plant. Then Prime Minister PV Narasimha Rao had given Rs2,200 crore preferential shares in 1992, which the company cleared long ago. Atal Behari Vajpayee saved the plant when it had burgeoning debt by approving capital restructuring following a public agitation. Saying that since its inception, RINL had remitted Rs55,000 crore to the government in the form of various taxes and duties, the VSEC leader demanded immediate revival of RINL or its merger/amalgamation with SAIL.