NEW DELHI, Apr 5: An employees’ association of Rashtriya Ispat Nigam Ltd has requested the government to direct SAIL to submit an expression of interest for the new business model proposed by the steel PSU.
Visakhapatnam-based Rashtriya Ispat Nigam Ltd (RINL) is exploring a business model wherein it will supply finished steel products to companies which will either fund its working capital or supply one or more raw materials. The last date to submit the EOIs is April 15, 2023.
In a letter to Steel Minister Jyotiraditya Scindia, the Steel Executive Association (SEA) of RINL has “requested for directions to SAIL to bid in EOI given by RINL for providing working capital/raw materials against supply of steel by RINL”.
Under the government’s National Steel Policy, RINL took efforts and more than doubled its capacity to 7.3 million tonnes (MT) despite any captive linkage of iron ore and coal mines since inception, the body which represents RINL executive said.
“The proposal is a win-win for all as RINL’s Visakhapatnam Steel Plant (VSP) is the only shore-based integrated steel plant with two major ports in the vicinity of just 25 km. The machinery installed at the plant produces world-class products for various industries,” KVD Prasad, General Secretary, SEA, told PTI.
In the letter, SEA noted that SAIL, which like RINL is also a PSU under the Steel Ministry, doesn’t have any production unit in South India for long products and transports it to its yards in the south. In the recent past, SAIL got export orders in structural and intermediate products.
RINL is the biggest PSU single steel manufacturing unit. All these can be produced in RINL and port connectivity can be utilised to make outbound shipments.
SAIL is also importing coking coal from Gangavaram port in Visakhapatnam, and transporting the steel-making raw material to its plants by rail which is costing around Rs 1,000 per tonne. This is adding to SAIL’s cost of production of steel.
“SAIL can convert its unused iron ore fines into quality steel products with good techno-economic factors with fewer investments. RINL also will be benefited as its production cost will come down significantly by maximum utilisation of equipment and well-trained manpower,” the letter said.
RINL could not achieve its rated capacity due to the financial crisis. In absence of captive iron ore and coal mines since inception, its production cost of per tonne steel is Rs 6,000-7000 more than any other steel plant in the country, SEA said apprising the Minister about the financial and operational challenges being faced by the company.
“Out of three, only two blast furnaces are in operation. The third one was shut down in January 2022 due to lack of coking coal and working capital. This tie-up of SAIL and RINL will certainly strengthen our Government’s aim of Atmanirbhar Bharat,” the association said. (PTI)
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