MMTC and Orissa government promoted Neelachal Ispat Nigam (NINL) aims to commission the steel making facility at its Kalinganagar unit in Orissa by March, 2011.
The company at present is producing only pig iron at this plant. After completion of the new project, the company will produce 1.1 million tonne of billets per annum which will be converted into bars and rods at a later stage.
“The construction work for steel making unit is going on full swing and it is likely to be commissioned by March 2011”, says PC Sahu, managing director, NINL.
The project is being implemented at a cost of Rs 1800 crore which is funded with fresh equity infusion and internal accruals to the tune of Rs 743 crore and loans of Rs 112 crore. All the funds are tied up, Sahu said, adding that the loan is being provided by a consortium of banks led by State Bank of India.
The company has already spent about Rs 800 crore on the project till date.
Meanwhile, the equipment erection work is going on at the site and the coal trial of steel mill and continuous casting plant is scheduled to be done by the end of this year. The oxygen plant is expected to be ready by December, 2010.
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While the cold trial of integrated operation of steel making process will be conducted in January/February next year, the hot trial and actual steel production will be taken up in March 2011.
NINL, promoted by MMTC and the Orissa government in joint venture in ’90s, earned a profit of Rs 37 crore in 2009-10. The company produced 6,57,000 tonnes of pig iron, 4,59,000 tonnes of BF coke and 236352 Mwh power during the year.
However, the company’s bottom line has come under pressure in the first six months of the current year due to escalation in the cost of inputs, particularly the iron ore which the company is forced to source from private parties following the closure of operation of the Orissa Mining Corporation (OMC) owned Daitary mines located close to the Kalinganagar area. In the first six months of the current year, the company has run up a loss of Rs 50 crore, the sources said.