Visakhapatnam Steel Plant's Manganese Dilemma

RINL
RINLImage Source: The South First

Synopsis

Rashtriya Ispat Nigam Limited, the corporate entity of Visakhapatnam Steel Plant, faces a shortage of manganese ore for steel production after the expiry of its lease for captive mines in Vizianagaram district. RINL is now procuring manganese ore at a significantly higher cost from alternative sources. The State Government has the authority to renew the lease, and efforts are underway to secure the renewal. The situation underscores the importance of resolving this issue promptly to ensure the steel plant's smooth operations.

Article

Visakhapatnam Steel Plant, operated by Rashtriya Ispat Nigam Limited, is grappling with a critical shortage of manganese ore needed for steel production. This predicament arises from the expiration of RINL's lease for captive manganese ore mines in Garbham village, located in the Merakamudidam mandal of Vizianagaram district, on October 7, 2022. These mines, spanning 264.54 hectares, were under RINL's control for nearly three decades until the lease ran out.

The State Government holds the authority to renew the lease, provided a request is made by the lessee. In this regard, both the RINL-VSP management and Visakhapatnam MP M.V.V. Satyanarayana have approached Chief Minister Y.S. Jagan Mohan Reddy, urging the renewal of the lease for RINL-VSP. The MP's action followed a representation from the RINL-VSP Steel Executives Association.

SEA President Katam SS Chandra Rao explained, "Yes, we have approached Visakhapatnam MP regarding the renewal of the manganese ore lease for the Garbham mines in Vizianagaram for RINL-VSP. The MP wrote a letter to the CM. However, there has been no further progress in response to our representations. RINL-VSP is currently procuring manganese ore from alternative sources at considerable expense."

To sustain steel production at levels of 300,000-400,000 metric tonnes per month, RINL requires approximately 500 metric tons of manganese. Before the lease expiration in October 2022, the cost of extracting manganese ore from captive mines in Vizianagaram district was approximately ₹5,000-₹6,000 per metric ton. However, since then, RINL has been forced to procure manganese from the Nagpur-based Miniratna state-owned manganese ore mining company MOIL. This alternative source imposes a much higher cost, ranging from ₹11,000 to ₹13,000 per ton of manganese. MOIL operates mines in Maharashtra and Madhya Pradesh, providing ore from the nearest available location.

An unnamed RINL-VSP official expressed the plant's current predicament, stating, "Yes, we are currently procuring manganese ore from MOIL at a commercial rate, as the lease for RINL's captive ore in Vizianagaram district is yet to be renewed. We are incurring additional expenses to secure the ore. We remain hopeful that the issue will be resolved, and the lapsed lease with Garbham mines in Vizianagaram will be renewed promptly by the relevant authorities."

Conclusion

The expiration of RINL's lease for manganese ore mines has left Visakhapatnam Steel Plant in a challenging situation, necessitating the costly procurement of manganese from alternative sources. Efforts to renew the lease are ongoing, and resolving this issue promptly is vital to ensure the smooth operation of the steel plant.

Related Stories

No stories found.
logo
SteelGuru Business News
www.steelguru.com