Steel PSU, Neelachal Ispat Nigam Ltd (NINL) has executed the mines development and production agreement with the district authorities of Keonjhar and Sundargarh for its captive iron ore mines.
The lease deed was registered after obtaining the necessary approval from the Union ministry of environment, forest & climate change (MoEF&CC). The mining lease that will feed NINL’s integrated steel plant at Kalinganagar is spread over 874 hectares (ha). The lease deed is valid for 50 years as per the amended Mines and Minerals – Development & Regulation (MMDR) Act, 2015. NINL would commence operations from this captive mine after receipt of necessary Stage-I and Stage-II forest clearance from MoEF&CC.
NINL’s captive mining lease has 102 million tonne of iron ore deposits. It got the environment clearance in November 2016 with a capacity to mine two million tonne of iron ore every year.
Presently, NINL meets its iron ore requirement by buying from the market through central government controlled trading firm Mines & Minerals Trading Corporation (MMTC). With a share of 49.9 per cent, MMTC is the largest shareholder in NINL and carries out raw material procurement and sale of finished goods transactions on behalf of the steel PSU for which it charges a commission of three per cent.
Drawing iron ore from its captive mine is expected to save NINL’s working cost by Rs 250-300 crore each year.
NINL has set up an 1.1 million tonne integrated iron and steel plant at Kalinganagar, Odisha. It is the country’s highest exporter of pig Iron since 2004. Presently, the products are steel billets, pig iron and LAM (Low ash metallurgical) coke along with nut coke, coke breeze, crude tar, ammonium sulphate and granulated slag.
NINL is selling more of its pig iron in the domestic market and is able to recover cost of production and stay EBITDA (earnings before interest, taxes, depreciation and amortisation) positive.
It has chalked out a plan to achieve steel output of five mtpa in two phases. Full capacity expansion estimated to cost Rs 25,000-30,000 crore, is slated to be achieved by 2025.
The steel PSU has decided to import 60,000 tonne of coking coal as it looks to step up its hot metal production rate towards the first quarter (April-June) of 2017-18. MMTC has already floated global tenders for import of coking coal.
NINL aims to reach its rated production capacity of 3000 tonne per day from the beginning of next fiscal.
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