KIOCL CMD meets Union Minister Shri Narendra Singh Tomar with resurgent plans

Malay Chatterjee, CMD KIOCL, met the Hon’ble Minister for Mines, Steel, Labor & Employment Shri Narendra Singh Tomar at the Steel Ministry on Wednesday. Interacting with Steel Minister, CMD stressed upon various matters concerning the Steel Industry at large and specific issues connected to KIOCL in particular, seeking his assistance for rejuvenation of KIOCL. Touching upon various prospects, he expressed concerns for reinstating the company to its past glory.

During the course of interaction, CMD KIOCL explained that Company is now operating with the only vertical, the Pellet Plant, with the iron ore sourced from NMDC mines at Kirandul and Bacheli though it earlier had other verticals such as mining, beneficiation and Blast furnace unit with operational profits on year on year basis.

In line with Apex Court’s verdict, KIOCL had earlier stopped its mining operation at Kudremukh since December 2005 and it is currently dependent on NMDC’s Chhattisgarh mines for the ore for its Pellet Plant at Mangalore. But incurring huge logistics cost, the company is still operating with very thin margins. The imposition of distance based charge by railways along with export duty has taken a huge toll on its export front. The strategic maneuvering of the company’s finances, production, sales and treasury management has ultimately resulted in achieving a profit of Rs 40 Crore during 2013-14 as against Rs. 32 Crore the previous year after taking care huge provisioning for past years, remarked Shri Chatterjee.

On various strategic plans of the Company, Shri Chatterjee sought for Minister’s patronage and intervention for enhancement of the production capacity of pellets to 10-14 MT through a series of Joint Ventures with other Central and State Public Sectors in States of Karnataka, Andhra Pradesh and Odisha. The Company is also geared up for opening its new vertical in Operation and Maintenance (O&M) for better utilization of its manpower and expertise .To begin with, Beneficiation plant of capacity 1.89 MTPA and 1.2 MTPA Pellet Plant of NMDC Donimalai has been finalized in favor of the highly competent and KIOCL in Pelletisation industry.

KIOCL is actively exploring ways to restart pellet exports after a gap of three years. In this regard, he also reiterated that the company is in dialogue with potential overseas customers for export of pellets with the intervention and patronage of the Steel Secretary Sri C Mohan Kumar.

He also informed Hon’ble Minister that company with the directions of Secretary Steel in pursuing vigorously to tap the international avenue of entering into conversion contract with Iran and other West Asian countries where concentrate is abundantly available. This arrangement would not only enable the capacity utilization of our plant but also helps the company in revenue generation and tapping the potentials of its remaining trained workforce.

Shri Chatterjee urged the Hon’ble Minister to consider allocation of mining leases pending with various State Governments and consider a captive mines on urgent basis which would go a long way in rejuvenation of the company.

We have left no stone unturned in requesting the Govt of India to intervene for the revival of the company. Recently, Chatterjee met Hon’ble Minister of State for Steel, Mines , Labour & Employment and explained on ambitious plans ahead of the company and requested to consider allocation of mines which are pending with various State Governments. On this occasion Shri Vishnu Deo Sai released the House Magazine “Horse’s Mouth”.

KIOCL to revive pellet exports to West Asia

KIOCL is actively exploring ways to restart iron pellet exports after a gap of two years. The company is in talks with potential buyers in Iran and else where in West Asia for exporting pellets. Recently, Indian Steel Secretary held discussion in this regard with a business delegation from Iran and the deputy minister of mines, government of Iran and offered to make use of the excess pelletisation capacity available at KIOCL’s Mangalore plant for pelletisation of iron ore fines from Iran. KIOCL operates a 3.5 million tone per annum pellet plant at Mangalore with a captive berth at New Mangalore Port. It produced 1.7 million tones and sold 1.6 million tones of pellets in 2013-14. It has offered the remaining 50 percent of the capacity to Iran for making pellets.

Subsequently, Chatterjee has interacted with Khalil Maleki Raaee, the first secretary, economic section, Embassy of the Islamic Republic Of Iran and appraised him of the capabilities and facilities available at KIOCL’s pellet plant. KIOCL has experience in mining and beneficiation of iron ore and is operating its plant for more than 25 years. Iran has been offered that the ore imported from them will be converted to pellets with a Fe content of 64 percent and export it back to their steel mills. As KIOCL is equipped with captive berth and mechanized loading facilities, facilitates “on arrival berthing” which can be used to import and export Iron ore and pellets.

KIOCL has a long standing relationship with Iran for supply of pellets. Since 1969, the company has been making pellets at its Mangalore plant and exporting to Iran. However, it suspended exports for the last two years due to distance based charge (DBC) imposed on iron ore by the Indian Railways. Chatterjee recalls that during his visit to Iran along with KIOCL team to Esfahan Steel and Mobarekh Steel, they were informed that there is an ample quantity of iron ore fines generated in Iran, which could be utilized for pelletisation at Mangalore plant. The proposal would be more economically viable to bring iron ore from Iran and convert it into pellets in India because the company is already sourcing ore from Kirandul and Bacheli sector in Chattisgarh which is about 2200 km from Mangalore. When compared to the existing system of sourcing of iron ore, the distance between Mangalore and Iran is much lesser and it would also provide ore security in the form of blast furnace grade pellets for steel plants in Iran.

KIOCL wants to start exports once again from this year to make use of the idle capacity even though the margins are thin due to lower spot prices in the export market. However, we want to keep running the plant and reduce the overhead costs. But it will continue to sell pellets in the domestic market as the prices have gone up in the recent past. Efforts are also being made by Federation of Indian Mineral Industry (FIMI) for withdrawal of 30%export duty on iron ore and bringing railway freight on par with domestic freight. If that is done, exports of iron ore can go up to 70-75 million tones per year. Applications for mining lease are pending with various state governments and expedite of these proposals will enable effective utilization of its remaining trained manpower thereby the company can look forward to widen its area of operations not only in Karnataka but in other states also.

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