Vizag steel plant on brink of closure as Adani Port strike cripples coal supply

Visakhapatnam: Once described as 'pride of Telugu-speaking people,' Visakhapatnam Steel Plant is now facing the threat of a potential shutdown with appeals from various quarters to resolve the strike at Adani Gangavaram Port Private Ltd (AGPPL) to restore normal supply of coking coal falling on deaf ears.

Production at Rashtriya Ispat Nigam Limited (RINL)'s steel plant has been curtailed to bare-minimum due to the crisis in sourcing coking coal from the port located in its backyard. Only one among three blast furnaces has been operated since the April 12 agitation at Gangavaram Port by the workers and representatives of displaced families over increase in wages curtailing the daily production to just 3,000 tonnes instead of 17,000 to 18,000 tonnes.

This has further complicated the financial woes of RINL, the corporate entity of VSP, which is facing the threat of privatisation since Centre's 2021 decision for strategic disinvestment due to its working capital crisis triggered a huge debt burden of around Rs 20,000 crore.

Presently, the operation of coke oven batteries with minimal production after diverting ships stranded at Gangavaram to Visakhapatnam Port Authority (VPA) is being done to prevent leakage of hazardous gases. Following a petition to resolve the coal supply crisis immediately by Steel Executives' Association (SEA) general secretary KV Durga Prasad, the Andhra Pradesh High Court directed the port management to hammer out a solution by June 24. Top officials from the district administration are unable to take part in wage negotiations due to its preoccupation in the election process.

For a long time, the third blast furnace which was shutdown, was revived during year-end after RINL signed a MoU with Jindal Steel & Power Ltd (JSPL) for working capital support or raw material supply of Rs 800 crore to Rs 900 crore. In return, RINL committed to supply 90,000 tonnes of cast blooms to JSP's plant at Angul in Odisha.

As a last-ditch effort, RINL Chairman-cum-Managing Director Atul Bhatt wrote a letter to the District Collector to intervene at the earliest to resolve the crisis. For the first time in its history, senior management executives and workers took out a rally to Gangavaram Port on Wednesday and urged them to extend their cooperation to facilitate supply of coking coal and limestone. RINL has a conveyor from the port to its steel plant to supply coking coal, one of the key raw materials through a conveyor.

Over 1000 employees of RINL including RINL Chief General Manager (Works)-incharge, CGM (HR) and other CGMs, General Managers, Heads of Departments, leaders of various trade unions walked from Balacheruvu gate of VSP and interacted with the agitating workers of Gangavaram Port.

The CMD said, "It is a matter of great concern that the court orders for transportation of coal to RINL through conveyor belt system or otherwise, forthwith, is still to be implemented in spite of desperate efforts from RINL side."

Bhatt said the Gangavaram Port has remained non-committal and has been maintaining that negotiations are under progress with the R&R employees. As per the order, the transportation of coal to RINL is to be implemented forthwith and it is independent of the negotiations to be continued. "Due to non-availability of required coking coal, the operations at RINL have been under forced throttling. The impasse in the matter, extending nearly for a month, is posing a severe threat to the health of the equipment as well as financial health of the company. The company is unable to meet even statutory payment obligations,"

“Under the circumstances, the management requested the district administration and the police to provide necessary security so that the transportation of critical materials i.e. coal is shifted by RINL peacefully through its own loaders and dumpers," he added.