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Neelachal merger proposal with RINL ‘under consideration’

Jun 20,2019

After reviewing the performance of Rashtriya Ispat Nigam Limited (RINL) by Dharmendra Pradhan new Steel Minister, various options are being considered to ensure optimum utilization of its resources. Lack of captive iron ore mines is one of the main bottlenecks for RINL, the captive entity of Visakhapatnam Steel Plant, the country’s first integrated shore-based steel plant.

 

The disinvestment of RINL, which was supposed to go for listing on November 16, 2012, has been put off on several occasions due to a variety of factors, which included volatile market conditions and flooding of the domestic market with cheap steel from China and CIS nations.

 

One of the proposals, which was mooted earlier to merge Neelachal Ispat Nigam Limited (NINL), which owns a 1.1 million tonne integrated steel plant at Kalinganagar in Odisha, with RINL is said to be under consideration after Mr. Pradhan took over as Minister for Steel sometime ago.

 

NINL’s merger with RINL was dropped in 2012 by the Ministry of Steel after Minerals and Metal Trading Corporation (MMTC), which holds a majority stake in NINL, rejected feelers for purchase of its stake.

 

MMTC holds 49.78% equity in NINL, Industrial Promotion and Investment Corporation of Odisha Ltd (IPICOL) owns 15.29% stake. Odisha Mining Corporation, National Mineral Development Corporation, and other entities own remaining stake in NINL, which owns iron ore blocks in Koida area of Odisha with estimated reserves of 110 million tonnes.

 

RINL recognized union president J. Ayodhyaram said they were reiterating their demand for merger of NMDC, the mining major, with RINL for mutual benefit. “We don’t have captive mines and NMDC has huge mining blocks in Chhattisgarh and other States. The management of Nagarnar Steel Plant will also become easy if the merger is allowed,” he said.

 

An estimated Rs20,000 crore has been invested in the construction of three million tonne Nagarnar Steel Plant near Jagdalpur in Chhattisgarh. Mr. Ayodharam said it was not able to launch production due to lack of experience and other technical problems. Incidentally, RINL depends on NMDC for sourcing its raw material from Bailadilla and Bacheli mines in Chhattisgarh.