New Delhi: State-run Rashtriya Ispat Nigam Limited (RINL) has sought the acquisition of the Bird Group of Companies (BGC), including Orissa Mining Development Corporation (OMDC), for securing iron ore reserves for expansion. According to RINL, it is willing to invest Rs500 crore to revamp OMDC’s operations.
“We do not have captive mines and are forced to procure ore from the market at sky-high prices. So, we have proposed to take over the entire BGC, including OMDC, which has iron ore reserves of 130 million tonnes to meet our growing production needs,” said P K Bishnoi, chairman and managing director, RINL.
He said steelmakers with iron ore security have a better turnover.
“I have to buy iron ore from the market at around Rs3,000 per ton, which is a pretty high price... RINL’s profits could have been higher by Rs1,000 crore, if we had captive mines,” Bishnoi said.
A Parliamentary Consultative Committee had expressed the need to ensure availability of critical raw materials like iron ore and coking coal for both present as well as post-expansion needs of steel PSUs. The Committee supported curbing iron ore exports.
The government is yet to take a call on the Bagchi’s Committee’s recommendations on the BGC. “The Committee’s report is still under our consideration. We will take a decision in due course of time,” a senior Steel Ministry official said, adding that RINL is in dire need of mines for executing its long-term plans.
OMDC is not in good shape due to outdated machinery. Bishnoi assured that RINL was willing to invest about Rs500 crore to overhaul OMDC’s operations and pledged “RINL would not be found lacking if more money was required”.
Bishnoi further said that apart from its proven reserves, if OMDC was given to RINL, the latter would utilise its in-house expertise in prospecting more fields to figure out additional ore reserves for meeting RINL’s future needs.
RINL’s expansion plan involves a capital outlay of Rs8,692 crore to raise its steel production capacity to 6.3 MT from the current level of 3.4 MT.
At one point of time, the company was even mulling importing a shipload of iron ore from Brazil on experimental basis. However, it did not work out.
OMDC was incorporated in 1918 and its authorised share capital is Rs 0.60 crore. Its mines are located around Barbil in Orissa and is one of the oldest iron ore mining companies.
OMDC ventured into export of iron ore fines from 2005-06 and earned good amount of foreign exchange.
The BCG has seven companies within its fold including OMDC, Bisra Stone Lime Company Limited, Karanpura Development Company Limited Scott and Saxby Limited, Eastern Investments Limited, Burrakur Coal Company Limited and the Borrea Coal Company Limited.