The Hindu Business Line : Vizag Steel to have captive berth at Gangavaram port

Rashtriya Ispat Nigam Ltd (RINL), the holding company of Vizag Steel Plant, is looking forward to Gangavaram port, to be ready for operation in about a year's time, not only to handle larger volumes of raw materials such as coking coal and lime stone that are currently being imported through Visakhapatnam port but also to start import of iron ore. Right now, iron ore is sourced entirely from domestic sources.

"We'll have a captive berth in Gangavaram port to facilitate our imports and exports," said a spokesman for the company. RINL currently imports about three million tonnes of coking coal annually through Visakhapatnam port.

Also, iron ore import is one of the various options being examined to overcome, at least partially, the present problem of sourcing the mineral from domestic sources.

The present problem will only increase, as the requirement of ore will rise with the capacity expansion of the plant.

Coking coal requirement is to jump to more than 6 mt annually by 2008-09 when the first phase of the expansion work, currently in progress, will be complete.

The iron ore requirement by that time will rise to 10 mt from the present around 6 mt annually. "We've several plans for Gangavaram," said the spokesman, explaining that there was a proposal for setting up a coal blending plant at the port to achieve cost efficiency. It should be possible to import coking coal from various countries and blend them in the plant to achieve economy.

"It should also be possible to blend the imported varieties with local varieties to achieve the same objective. "We may have to construct a four-km-long conveyor system to transport the blended product from the port to the plant," the spokesman said, adding, "Frankly, we would like to cut out rail transportation".

Explaining the rationale behind the proposal for iron import, the spokesman pointed out that the Gangavaram port, with a draft of about 20 metres, should be able to handle large bulk carriers with an average parcel load of 200,000 tonnes or so.

"Importing bulk items in large vessels is always cost-effective and we're therefore examining the import option," he said. The iron ore import, he, however, made it clear, would be considered only if the landed cost of the import was less than that sourced domestically.

RINL has also urged the promoters of the Gangavaram port to go in for complete mechanisation of the berth to be dedicated to Vizag Steel Plant.

"We also import limestone and our import requirement will only increase in coming days and without mechanisation of the port level operation it will be difficult to handle the projected increased volume," he added.

In the first half of the current fiscal (April to September 2006-07), the exports amounting to Rs 211 crore posted 52 per cent growth over Rs 139 crore in the same period of 2005-06. However, the figure is projected to be much higher in coming years as RINL's marketing strategies presuppose, among other things, thrust on exports.