BL reported that the financial health of Rashtriya Ispat Nigam Limited will change dramatically once the city based public sector gets majority stake in Orissa Mineral Development Corporation as the raw material security of RINL would have tremendous effect in cutting down cost.

RINL would need 10 million tonnes of iron ore once it completes its production capacity to 6.3 million tonnes per annum next year. For producing one tonne of steel, 1.6 tonne of iron ore is required. Presently, RINL is spending INR 4,000 per tonne on iron ore.

Mr Ardhendu Dakshi president of Steel Workers Federation of India told The Hindu “Once it gets iron ore from OMDC, which has 200 million tonnes of reserves, RINL has to spend INR 500 to INR 550 per tonne including raising and carrying cost. This will lead to a saving of around INR 3,500 per tonne. So this way for producing three million tonnes of steel, RINL could save INR 1,750 crores per year.”

The production in RINL will go up to 16 million tonnes by 2020 according to its corporate plan. Mr Daskhi is hopeful that the steel scenario will improve phenomenally in coming years and neither recession nor China will have any impact on the growth of steel industry in the country.

(Sourced from BL)