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VSP bid to acquire captive mines

By Our Staff Correspondent

KOLKATA. DEC. 20. Vizag Steel has applied for three captive ore blocks of 200 million tonne reserve each in Orissa, Chattisgarh and Jharkhand. Mooted early this year, the application was finally forwarded to the Union Steel Ministry last week.

Solely dependent on the raw material supplies from NMDC, the company now bears 45 per cent raw material cost, rated as one of the highest in the steel industry. The comparable costs of Tata Steel and SAIL are believed to be close to 25 per cent and 37 per cent. According to sources the costs are bound to rise manifold in future in view of the rising ore prices across the globe.

Apart from cost involvement, the dependence on NMDC supplies and its due impact on the company's growth initiative had been a major reason behind Vizag's initiative to acquire captive mines. At present operating at 125 per cent capacity utilisation in hot metal production, the company had recently floated a global tender to meet its increasing demand for ore.

Meanwhile, the company is registering Rs. 120 to 130 crores of profit a month. The net profit went up to Rs. 650 crores in the first eight months from a total of Rs. 521 crores during the whole of 2002-03. "If everything goes well we will cross the Rs. 1,000 crore profit mark this fiscal,'' sources told The Hindu.

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