VSP cuts steel production as strike at Adani port cripples coking coal supplies

Visakhapatnam: Hectic efforts are on to hammer out a solution to the stalemate arising out of severe shortage in availability of coking coal at Visakhapatnam Steel Plant (VSP) as a sequel to the strike by the workers of Adani Gangavaram Port Private Limited (AGPPL).

The strike demanding wage revision and parity among the workers as per promises made in the past and other demands since past few days has brought cargo handling operations to a standstill at the private port, located on the backyard of the steel plant.

VSP, which has a production capacity of 7.3 million tonnes is being forced to drastically cut the production of steel due to worsening raw material crisis. Rashtriya Ispat Nigam Limited (RINL), the corporate entity of VSP, imports most of its coking coal requirement through Gangavaram Port. Two ships which brought the raw material from Australia are stranded at the port due to the sudden strike by the workers union from past five days. An official of RINL told Bizz Buzz on Wednesday that there was no change in the situation of the steel plant. He said they are trying their level best to resolve the impasse. SAIL is rushing two rakes of coke from other units. Efforts are also on to mobilise more rakes from other units of SAIL.

In a rare show of unity, the representatives of all the trade unions and officers have urged the State Government to intervene and solve the crisis. A team of union leaders called on District Collector A Mallikarjuna on Tuesday evening. Of the five coke oven batteries, the steel plant has already shut down three reducing steel production drastically,

In a significant development, Steel Executives' Association (SEA), which represents 4,400 executives of RINL, sent an SOS to the State Government to allow unloading from coking coal-laden ships stuck at the Gangavaram Port.

As quality coal is not available in India, different types of coals are imported from Australia, South Africa, Indonesia and other countries. Now with the present crisis coming as fuel to fire, the pushing has been slashed further.

For normal production, the steel plant maintains a one month buffer stock at our plant. RINL have a conveyor belt to shift coal and limestone from Gangavaram Port. After the development of Gangavaram Port, RINL has an agreement to transfer coal by conveyor as the port is sharing its boundary wall with the steel plant. This also makes evacuation of coal pollution-free and economic.

"As the steel plant is already in difficulties on account of various other issues like absence of captive mines, working capital, privatisation row etc., the present problem of coking coal supply created due to the strike of Gangavaram Port workers has hugely impacted our operations, adding fuel to fire. As you are aware, the operations at the steel plant are very sensitive and any shutdown will have serious ramifications due to possible leakage of hazardous chemicals and lethal gases," SEA president Katam SS Chandra Rao and general secretary KVD Prasad, said in a representation to the district administration.

"Two of the coke oven batteries are operating at zero production and the third is also being shut down. We suspect a larger conspiracy behind not allowing cargo discharge from Gangavaram Port after delaying disbursement of salaries to the steel plant employees by the management, any further delay may cause serious damages to the coke oven batteries and the blast furnaces due to sensitivity of the facilities," J Ayodhyaram, honorary president of CITU-affiliated Steel Plant Employees' Union (SPEU), told Bizz Buzz.