Financial Daily from THE HINDU group of publications
Tuesday, Jul 13, 2004
Financial Daily from THE HINDU group of publications Tuesday, Jul 13, 2004 |
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Corporate
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Announcements VSP to invest Rs 1,000 cr in iron ore, coal mining Kohinoor Mandal
Visakhapatnam , July 12 VISAKHAPATNAM Steel Plant (VSP), belonging to Rashtriya Ispat Nigam Ltd (RINL), has earmarked Rs 1,000 crore of investments for iron ore and coal mining. The company, which has become a zero-debt organisation since last year, is also talking with several coal companies in Australia and one in Canada for setting up mining joint ventures. According to Mr B.K. Panda, Chairman-cum-Managing Director of RINL, the company is also negotiating with the State Governments of Orissa and Chhattisgarh for iron ore mining blocks. "The dialogues with the State Government are extremely positive and we are confident that the blocks will be awarded to us as early as possible," Mr Panda told Business Line. In Chhattisgarh, RINL is eyeing the Rowghat block and in Orissa, it has applied for the Malatoli block. Mr Panda said the Orissa Government had already assured RINL that it would give this block to the company as "it is a steel producer". Regarding overseas coal mining joint ventures, Mr Panda said RINL was holding talks with eight to 10 Australian coal majors. "Meanwhile, we have also received proposal from a Canadian company. They are interested in setting up a joint venture. We are looking into the proposal," he said. Mr Panda added that of the approximately Rs 1,000 crore being set aside for the mining joint ventures, iron ore and coal would get around Rs 500 crore each.
During the last one-year or so, steel companies in India and in several other countries have faced severe coking coal shortage mostly because of the flooding in Australian coal mines. In view of this, steel companies have been busy establishing their raw material linkages. RINL, which has never had any iron ore mine, is faced with the same crisis. The company has worked out aplan for expanding its capacity from 3.5 million tonnes per annum to 5 million tonnes per annum by 2008 and then to 10 million tonnes by 2012. The first phase of expansion will cost Rs 3,000 crore, of which Rs 2,400 crore will be generated internally and the rest will be brought in by a partner, who would function on BOT (build-own-transfer) basis. The total expansion plan would cost around Rs 17,000 crore. RINL has already appointed the Kolkata-based steel consultant, Dasturco, for drawing up a feasibility report of the first phase of the expansion plan. The report is likely to be submitted next month.
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