Leading steel maker Rashtriya Ispat Nigam Limited (RINL) can finally breathe a sigh of relief as its raw material woes may soon be over. The government has approved making Orissa Mineral Development Corporation (OMDC) a subsidiary of the public sector undertaking, a top steel ministry official said.
"As part of the financial re-engineering of the Bird Group of Companies, which includes OMDC, Bisra Stone Lime Company (BSLC), Eastern Investments Limited (EIL), Scott and Saxby Limited (SSL) and the Karanpura Development Company Limited (KDCL), we plan to make them the subsidiaries of RINL," Steel Secretary P K Rastogi said.
Currently, the government's shareholding in the Bird Group of companies that deal in iron, steel and manganese, is in the range of 14 to 50 per cent. Rastogi said IFCI, the consultant appointed to assess the viability of financial re-structuring of the companies under administrative control of steel ministry, has approved it.
"We will re-structure the companies in such a way that RINL will have a majority stake in them," Rastogi said, adding that the proposal would be soon sent to the finance ministry and the Union Cabinet for the final nod.
Post-restructuring, Rastogi said, the companies would stand to gain from the PSU status and professional management of RINL, while the latter would have raw material security to carry out its brownfield expansion. RINL Chairman and Managing Director P K Bishnoi too said it would be a win-win preposition for all (the companies).
"With our expertise and resources, we would be able to add facilities at OMDC and in return get valuable iron ore and manganese for steel making," he said. Among the five active companies of the Bird Group, OMDC is the biggest with an annual turnover of about Rs 6,000 crore and total employees numbering 1,200. It possesses iron ore resources of about 200 million tonnes, which would suffice the need of RINL for about 15 years.
At present, the steel major procures over 6 million tonnes of iron ore, a vital raw material for making steel, from state owned miner NMDC. The Mini Ratna company, which specialises in long steel products that are widely used by the construction sector, has been on a lookout for domestic and overseas mining assets to ensure raw material security, but has not been able to get one.
While it has applied for mining blocks in almost all mineral-rich states such as Jharkhand, Orissa and Chhattisgarh, it is also exploring the possibility of acquiring foreign mining properties. RINL has embarked on a Rs 12,000-crore expansion plan to increase its annual capacity. to 6.3 million tonnes of liquid steel from 3 million tonnes by 2011-12. To reach the planned capacity, it would require over 12 million tonnes of iron ore every year.
