KIOCL to form joint operations wing with RINL

Both companies plan to explore opportunities in mining, value addition projects in state.

Bangalore-based KIOCL Ltd and Vizag-based Rashtriya Ispat Nigam Ltd (RINL), the public sector units under the ministry of steel have come together to set up a joint operation wing for the establishment of mining and value addition projects in Karnataka.

Both companies have taken approval from their respective boards and the parent ministry of steel to form the joint working group. The joint operation wing will be set up in the presence of chairmen of both the companies and minister of steel Virbhadra Singh in Bangalore on November 14, official sources in KIOCL said.

As per the understanding worked out between both the companies, to begin with, they are working on setting up a ductile iron spun pipe (DISP) plant in Mangalore, where KIOCL has a pellet plant and blast furnace unit. “The board of KIOCL has already given its green signal for this project and the approval from RINL board is awaited. The steel ministry has also given its nod for this project,” a senior official of KIOCL told Business Standard.

The DISP plant, which will have a capacity of 100,000 tonnes per annum, will see an investment of Rs 315 crore. Both KIOCL and RINL are working out the equity structure for the new company to take up this project, the official said.

Presently, the KIOCL is in the process of preparing the detailed project report for the DISP plant. The new plant will be located at its existing land in Mangalore.

There is a huge demand for spun pipes from various state governments, urban development bodies. They are used in irrigation projects, drinking water supply and sewerage projects and other large infrastructure projects.

“KIOCL has strengths in carrying out low-grade iron ore mining and pelletisation process, while RINL has expertise in making steel. We will make use of these strengths and explore opportunities in mining and value addition in the iron and steel sector,” the official said.

The joint operation wing will also explore other opportunities like scouting for new iron ore deposits in the state of Karnataka and setting up of coke oven battery plant. Presently, KIOCL is in need of coke for its blast furnace unit, which it plans to source from RINL. At the same time, RINL may look for sourcing pellets from KIOCL, the sources said.

KIOCL has already applied for fresh mining lease in Ramanadurga region in the iron ore rich Bellary district of Karnataka.

The state government is in the process of making a recommendation to the Centre for prior approval to allot iron ore deposits to new steel mills coming up in the state including KIOCL.