The corporate entity of Visakhapatnam Steel Plant, Rashtriya Ispat Nigam Limited and South Korean conglomerate POSCO have jointly proposed to set up a second steel plant in Vizag. Reportedly, the Ministry of Steel is in talks with the Andhra Pradesh State Government regarding the establishment of this new plant.
The project is estimated to have an investment of INR 20,000 crore, and RINL’s land may become its equity once the deal takes a final shape. POSCO reportedly wanted 3,000 acres for the whole venture. During the first phase, the representatives of POSCO plan to install a plant that manufactures value-added grades which are likely to be used in spare parts of automobiles.
Speaking in this regard, the Andhra Pradesh Minister for Industries, Mekapati Goutham Reddy, informed that the AP State Government has requested the Ministry of Steel, to make certain amendments to the proposal which would benefit the state revenue. He added that the project will be taken forward, based on the Centre’s decision.
The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi gave an ‘in principle’ approval for strategic disinvestment in Neelachal Ispat Nigam Limited (NINL). Commenting on the decision, Information and Broadcasting Minister Prakash Javadekar said that this will be a strategic disinvestment without the transfer of management control and it would also create employment opportunities.
Union steel minister Dharmendra Pradhan said the decision to divest equity share of the existing agencies will lead to technology and capital infusion by new investors and improve productivity. He said “The decision will also help in increasing production capacity from the existing 1.1 mtpa to 10 mtpa in two phases. It will also increase the employment opportunities in the plant and accelerate the socio-economic development of the region.”
NINL is a joint venture of the Centre and Odisha governments through their public sector enterprises and has an equity shareholding of Metals Trading Corporation Limited (49.78 percent), National Mineral Development Corporation (10.10 percent), MECON (0.68 percent) and Bharat Heavy Electricals Limited (0.68 percent) and Odisha government PSEs, Industrial Promotion and Investment Corporation of Odisha Limited (12 percent) and Odisha Mining Corporation (20.47 percent). NINL has set up a 1.1 million ton Integrated Iron and steel plant at Kalinganagar, Duburi, Dist-Jajpur, Orissaand mainly produces are pig iron nut coke, coke breeze, crude tar, ammonium sulphate and LAM coke.
The management was forced to operate only the coke oven in the plant at Kalinganagar due to a lack of capital investment by the equity shareholders. Experts believe that the strategic location of the NINL plant spread over an area of around 2500 acres and the Koida iron ore mines spreading across Keonjhar and Sundargarh district having a total deposit of 102 million tonnes of ore will draw key players in the steel sector to take over the unit. It is expected that the successful strategic buyer will bring in new management, technology, and investment for the growth of the company.
