The Hindu Business Line : AP keen on RINL-NMDC merger

Visakhapatnam, Aug. 5 The Andhra Pradesh Government is keen on the proposed merger of Rashtriya Ispat Nigam Ltd (Visakhapatnam Steel Plant) with the National Mineral Development Corporation (NMDC), as there is synergy between the two public sector units, according to the Chief Minister, Dr Y.S. Rajasekhara Reddy.

The Chief Minister said at a press meet here on Tuesday that the State Government had taken up the issue with the Union Government and he had spoken to the Prime Minister on the need to expedite matters. “We will pursue the matter,” he said.

It may be noted that the main disadvantage suffered by VSP is the lack of captive iron ore mines, leading to high cost of production and uncertainty in supply, and at present the plant gets its iron ore through NMDC from the Bailadilla mines.

All the efforts made by the Vizag Steel to acquire captive iron ore mines in Orissa, Jharkhand, or Chhattisgarh have failed so far, as those States are demanding value-addition at the pithead level and are unwilling to part with iron ore mines.

In the backdrop, a proposal was mooted a few years ago to merge RINL in SAIL, but the proposal was opposed by the State Government. Dr Rajasekhara Reddy himself spoke against the proposal to merge RINL in SAIL at a public function last year in the plant in which the Prime Minister, Dr. Manmohan Singh, inaugurated the expansion work of RINL.

Subsequently, the proposal to merge RINL and NMDC was mooted to get over the problem of captive iron ore mines for the steel plant.

Mr Bishnoi, Chairman and Managing Director of RINL, is also in favour of the merger. He also feels it will be a win-win situation for both the PSUs and the State Government will also be in favour of it.

More Stories on : PSU | Mergers & Acquisitions | Steel

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