With no captive iron ore mines, Visakhapatnam Steel Plant in dire straits

Vijayawada: The Rashtriya Ispat Nigam Ltd (RINL)-run Visakhapatnam Steel Plant is losing up to Rs 1,000 crore a year on account of lack of captive iron ore. This, an official said, has made the plant unviable. The lack of captive iron ore mines increases the cost of raw material. The raw material cost of RINL is 63 per cent of the total cost, against 48 per cent in units of the Steel Authority of India Limited (SAIL) and 35 per cent for the Tata group’s plants.

Uncertainty over the timely availability and quality of the ore required is another problem. RINL buys the iron ore at market price. In spite of this big disadvantage, RINL has made huge profits since 2002. Its losses began in 2015-16 due to global recession, dumping of cheap steel by China, a huge capital investment of about Rs 18,000 crore, and massive escalation in the price of imported coal.

SAIL has large reserves of iron ore at Gua in Jharkhand which will last for more than 100 years. RINL invested Rs 360 crore in 2011 in Eastern Investments Limited (EIL), the holding company of Orissa Minerals Development Co Ltd (OMDC) and Bisra Stone Lime Co Ltd (BSLC), but has got absolutely no returns so far.