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Visakhapatnam June 8 The denial of captive iron ore mines to Visakhapatnam Steel Plant (VSP) by the Union Government is placing a huge burden on the plant, as it means higher cost of production, and "the generosity shown by the Government to the private steel plants, such as Posco in Orissa and Brahmani Steels in Andhra Pradesh, in granting mines baffles understanding", according to the district unit of the CITU.

At a press meet here on Friday, Mr A. Ajay Sarma, District General Secretary of the CITU, and Mr V. Dhanaraju, President of the Steel Plant Employees' Union affiliated to the CITU, said that with the expansion of capacity from 3 million tonnes (mt) to 6.2 mt, the ore requirement would go up to 11.7 mt.

Owing to high ore cost, the plant was incurring an additional burden of Rs 327 crore and it would go up further, they said.

"This public sector steel plant will not be able to compete with the private steel units, coming up in Orissa (Posco) and Andhra Pradesh (Brahmani Steels in Kadapa district of AP)."

Mr Sarma said the VSP, commissioned in 1992, had been pleading for captive iron ore mines since then, but the Government had not deemed it fit to heed to its plea. "On the other hand, the proposed steel plant by Brahamani Steels in Kadapa district has been granted 66 mt even before it has gone into production. The State Government has been equally generous in granting more than 10,000 acres at a nominal rate of Rs 18,000 per acre for the plant. On the other hand, for the public sector RINL, it has been an uphill struggle from the start," he said.

He said the Government should impose curbs on iron ore exports, if necessary, and grant mines to the established plants such as the RINL. "There is absolutely no justification for denying the RINL captive mines any longer," he added.

More Stories on : Outlook | Steel | Policy | Andhra Pradesh | Mining & Quarrying

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