Floats a global tender asking for EoIs from major producers
Seeking to import iron ore for the first time in its 33-year history, state-run Rashtriya Ispat Nigam (RINL) on Wednesday floated a global tender asking for expression of interests (EoIs) from major producers such as Rio Tinto and BHP Billiton.
The move is aimed at cashing in on the prevailing subdued price of the key steel-making raw material and reducing its reliance on PSU miner NMDC.
RINL, which currently sources almost its entire need from NMDC to feed the Vizag-based 2.9 mtpa lone steel-making facility, is the only government-run steel firm operating sans any captive source of the raw material. The other one, SAIL, has enough resources to survive for many years without requiring to buy from outside. It generally takes 1.6 tonne of iron ore to produce every tonne of steel.
“Global prices for iron ore have drastically fallen. We want to leverage on this. Intending that, we have issued a global tender inviting EoIs from major players. There appears to have some leverage available. If prices they quote are lower than that of NMDC, we will start importing the raw material for the first time in our history,” RINL’s CMD P Madhusudan told FE.
Having a coast-based facility, RINL would certainly enjoy the benefit on the transportation charges, which might prove to be cost-effective for the company in the long-run even taking into consideration that the prices of iron ore inched up from the current level.
RINL ‘s iron ore need is set to go up as the company is in the last leg of enhancing its capacity to 7.3 mtpa from 2.9 mtpa now. It has plans to ramp it further to 12 mtpa by 2020.
Odisha reaches just 51% of mining cap
The iron ore mining lease holders in Odisha have miserably failed to reach the production cap fixed for 2014-15. The output during the year was barely 51% of maximum limit allowed by the state government. As against the total cap of 57 million tonne, the mining lease holders have dispatched 29.2 million tonne in the last fiscal. “The lessees were allowed to raise iron ore up to 57 million tonne during the year,” state director of mines Deepak Mohanty said, adding that the total dispatch during the year was 29.2 million tonne. While the dispatch from the Joda mining circle was 17.2 million tonne as against the cap of 44 million tonne, the dispatch from Koira circle was 12 million tonne against the cap of 13 million tonne, the mines director said. Meanwhile, the Odisha government has started the process of fixing a cap for iron ore productions from the state during 2015-16. Mohanty said that a sub-committee within the state level task force on steel & mines is to recommend the production limit for iron ore during the current fiscal. (fe Bureau)