Public sector KIOCL (formerly Kudremukh Iron Ore Company Ltd) is on a turnaround path with the company wiping out its losses and posting a profit for the last fiscal.

It has also lined up a slew of new projects, which includes acquisition of a sick steel product company. “We have a healthy balance sheet now and have good reserves as well,” the KIOCL Chairman-cum-Managing Director, Mr K. Ranganath, told Business Line .

KIOCL had incurred a loss of about Rs 195 crore during 2009-10 but for the 2010-11 fiscal, it expects to post a profit of Rs 85 crore (PBT) on sales of Rs 1,790 crore, which is 80 per cent more than the previous year. The company has reserves of around Rs 1,200 crore.

Steel plant

Mr Ranganath said the process is on for setting up an integrated steel plant in Bellary-Hospet region with an investment of Rs 7,600 crore. KIOCL which will have a 26 per cent stake in the project, will invest about Rs 800 crore as its contribution.

The joint venture partner is United Telecom's company, URISPL. The initial capacity will be 1.5 million tonnes which can be expanded to 5 million tones a year.

Tungabhadra Steel

KIOCL is also looking at acquiring the sick public sector Tungabhadra Steel Products Ltd in north Karnataka but without any liabilities. The public sector undertaking has about 83 acres of land and the infrastructure. KIOCL wants to utilise the land and the facility for setting up a plant for beneficiating low grade iron ore, which is in abundant supply in north Karnataka.

Mr Ranganath said there is about 200 million tonnes of iron ore tailings (silt) at Lakya Dam, which is close to the Kudremukh mines. It can also be used for making tiles or as partial replacement to sand for the construction industry. If commercially exploited, it can generate a direct employment for more than 2,000 people for over 25 years.

Leftover ore

He said around 24 million tonnes of loose weathered iron ore is left in the Kudremukh mines. If left alone, it can flow down to river Bhadra, which can cause environmental damages. The company is seeking the Supreme Court nod to lift the ore so that the environment & ecology of the area can be protected. “The same ore can converted into pellets and it would be enough raw material for three years,” Mr Ranganath said.

The KIOCL has also put in place necessary facilities for achieving daily 15,000 tonnes of processed ore production and pellets. Even at 85 per cent of capacity utilisation, it can produce 3.6 million tons of pellets per annum. For 2010-11, KIOCL crossed 2 million tonnes of production and sales of pellets.

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