Seeking to import iron ore for the first time in its 33-year history, state-run Rashtriya Ispat Nigam (RINL) on Wednesday floated a global tender asking for expression of interests (EoIs) from major producers such as Rio Tinto and BHP Billiton.
The move is aimed at cashing in on the prevailing subdued price of the key steel-making raw material and reducing its reliance on PSU miner NMDC.
RINL, which currently sources almost its entire need from NMDC to feed the Vizag-based 2.9 mtpa lone steel-making facility, is the only government-run steel firm operating sans any captive source of the raw material. The other one, SAIL, has enough resources to survive for many years without requiring to buy from outside. It generally takes 1.6 tonne of iron ore to produce every tonne of steel.
“Global prices for iron ore have drastically fallen. We want to leverage on this. Intending that, we have issued a global tender inviting EoIs from major players. There appears to have some leverage available. If prices they quote are lower than that of NMDC, we will start importing the raw material for the first time in our history,” RINL’s CMD P Madhusudan told FE.
Having a coast-based facility, RINL would certainly enjoy the benefit on the transportation charges, which might prove to be cost-effective for the company in the long-run even taking into consideration that the prices of iron ore inched up from the current level.
RINL ‘s iron ore need is set to go up as the company is in the last leg of enhancing its capacity to 7.3 mtpa from 2.9 mtpa now. It has plans to ramp it further to 12 mtpa by 2020.
Source: Financial Express
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