RINL mulls Bird Group's takeover for ore needs

State-run steelmaker Rashtriya Ispat Nigam Ltd (RINL) has proposed to acquire the entire Bird Group of Companies (BCG), including Orissa Mining Development Corp, to secure iron ore supplies for meeting its long-term needs.

"We have proposed to take over the entire BCG, including the OMDC, which has iron ore reserves of 110 million tonnes to meet our growing production needs," RINL Chairman and Managing Director P K Bishnoi said here.

He said the company's bottomline was taking a serious hit as it was forced to procure ore from the market at sky-high prices.

"You will be surprised that RINL's profits could have been higher by Rs 1,000 crore if we had captive mines. SAIL and Tata Steel are comfortable in this connection," he said.

Even a Parliamentary Consultative Committee had expressed concern about the need to ensure availability of critical raw material such as iron ore and coking coal to cater to both present as well as post-expansion needs of the steel PSUs.

The Committee supported curbing export of iron ore. "Together SAIL and RINL are implementing their expansion plans worth more than Rs 60,000 crore and so obviously the iron ore requirement will shoot up accordingly," Bishnoi said.

RINL's expansion plan involves a capital outlay of Rs 8,692 crore to raise its steel production capacity to 6.3 million tonnes from the current level of 3.4 million tonnes.

"At one point of time we were even mulling to import a shipload of iron ore from Brazil on an experimental basis, but it somehow did not work out," he pointed out.

With the country's steelmakers embarking on a major capacity expansion, the steel ministry too has made out a case for conservation of iron ore saying it was imperative to make the sector competitive vis-a-vis that of China's.