Rashtriya Ispat Nigam Limited Seeks Renewal to Secure Vital Resource

In a challenging turn of events, the Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant (VSP), is facing a pressing issue related to the procurement of manganese ore, a vital component in steel production. The problem arose following the expiration of the lease for RINL's captive manganese ore mines in Garbham village, Merakamudidam mandal, Vizianagaram district, on October 7, 2022, after nearly three decades of operation.

The RINL-VSP has been heavily dependent on these captive mines, spanning 264.54 hectares, for the supply of manganese ore, a critical raw material for steel manufacturing. With the lapse of the lease, the State Government holds the key to renewing it upon request by the lessee.

Visakhapatnam MP M.V.V. Satyanarayana, along with the RINL-VSP management, has urged Chief Minister Y.S. Jagan Mohan Reddy to consider the renewal of the lease. This request comes in response to the representation made by the RINL-VSP Steel Executives Association (SEA).

According to Katam SS Chandra Rao, President of SEA, "We have represented to Visakhapatnam MP regarding the renewal of manganese ore lease for the Garbham mines in Vizianagaram to RINL-VSP. The MP wrote a letter to the CM. But, there is no further progress in response to our representations. The RINL-VSP is now procuring manganese ore from alternative sources by paying huge amounts.

The magnitude of this issue becomes evident when considering the substantial requirement for manganese ore by RINL-VSP. The plant demands a minimum of 500 metric tonnes of manganese to support its steel production of 3 to 4 lakh metric tonnes per month.

Prior to the lease expiration, RINL spent approximately ₹5,000-₹6,000 per ton of manganese extracted from their captive mines in Vizianagaram district. However, the situation has taken a costly turn as RINL now procures manganese from MOIL (formerly known as Manganese Ore (India) Ltd.), a Nagpur-based Miniratna state-owned manganese ore mining company. The current cost per ton of manganese from MOIL stands between ₹11,000 and ₹13,000, almost double the previous expenditure. MOIL operates its mines in Maharashtra and Madhya Pradesh, providing ore from the nearest sources.

An official from RINL-VSP expressed their perspective, stating, "Yes, we are procuring manganese ore from MOIL for the time being at a commercial rate as RINL’s captive ore (on lease) in nearby Vizianagaram district is yet to be renewed. We are spending extra money to buy the ore. We hope that the issue will be resolved and the lapsed lease with Garbham mines in Vizianagaram is renewed at the earliest from the authorities concerned."

The situation underscores the critical importance of addressing this issue promptly to ensure the continued production and sustainability of Visakhapatnam Steel Plant. Stakeholders eagerly await a resolution that will mitigate the financial strain caused by the increased procurement costs and secure a reliable source of manganese ore for the steel industry.