Neelachal Ispat Nigam to import 60,000 tonne of coking coal

State-run PSU aims to reach rated production capacity of 3,000 tonne per day from beginning of FY18

Public sector steel maker Neelachal Ispat Nigam Ltd (NINL) has decided to import 60,000 tonne of coking coal as it looks to step up its hot metal production rate towards the first quarter (April-June) of 2017-18.

NINL aims to reach its rated production capacity of 3,000 tonne per day from the beginning of next financial year. Two days back, the blast furnace of its integrated steel unit at Odisha's Kalinganagar logged its highest ever daily output of 2,307 tonne.

For NINL steel plant, coking coal imports will be done by the state —run trading company — Mines & Minerals Trading Corporation (MMTC) which is the largest shareholder in NINL with an equity of 49.9 per cent. 

Two Odisha government public sector undertakings (PSUs) — Odisha Mining Corporation (OMC) and Industrial Promotion & Investment Corporation of Odisha Ltd (Ipicol) own stakes in NINL. Central PSUs like National Mineral Development Corporation (NMDC), Bhel Ltd and Mecon have minor equity participation.

According to an agreement, MMTC procures raw materials for NINL and sells its finished products. The trading company charges three per cent commission for the transactions.

MMTC has already floated global tenders to import coking coal to cater to NINL's requirement. The consignment is to be shipped to Paradip port between January and March 2017.

In NINL, execution of the blast furnace capital repair is planned in the first quarter of 2017-18. After the capital repair, hot metal production will be more than 3000 tonne per day in its rated capacity.

The steel PSU has set up a 1.1 million tonne integrated iron and steel plant at Kalinganagar, Odisha. It is the country's highest exporter of pig iron since 2004. Presently, the products are steel billets, pig iron and LAM (Low ash metallurgical) coke along with nut coke, coke breeze, crude tar, ammonium sulphate and granulated slag.

NINL is selling more of its pig iron in the domestic market and is able to recover the cost of production and stay EBITDA (earnings before interest, taxes, depreciation and amortisation) positive.

It has chalked out a plan to achieve steel output of five mtpa in two phases. Full capacity expansion estimated to cost Rs 25,000-30,000 crore, is slated to be achieved by 2025.