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RINL chief moots merger plan with NMDC

KOLKATA: The Chairman of Rastriya Ispat Nigam Ltd (RINL), P. K. Bishnoi, on Thursday mooted the idea of a merger with National Mineral Development Corporation (NMDC) saying that this should be a winning proposal for the companies which could complement each other.

Addressing a press conference here, he said while RINL’s strong point was the 22,000 acres that it had in addition to a port, besides its expertise in steel-making, its weakness was the lack of any iron ore mine. NMDC, on the other hand, is India’s largest producer of iron ore and the cash-rich company is now planning downstream value-addition by getting into steel-making.

Answering a volley of queries that this suggestion triggered, Mr. Bishnoi said that informal talks had already been held with the Union Steel Ministry on this. Both companies were under the same ministry and both were based in Andhra Pradesh, he said. He projected that by 2020 the merged entity would produce about 50 million tonnes annually of iron ore and 25 million tonnes of steel.

He said the idea first germinated after the shelving of the proposal under which NMDC, SAIL and RINL were to set up a three million tonne capacity steel plant in Chhattisgarh. Later, RINL and SAIL withdrew from the project and NMDC is now implementing it on its own.

On International Coal Ventures, the special purpose vehicle formed between SAIL, CIL, NTPC and NMDC, Mr. Bishnoi said the Rs. 20,000-crore corpus was now looking inadequate since prices of coal-bearing properties abroad had increased substantially. He suggested the creation of a $50 billion sovereign fund to meet any funding gap.

On the year’s performance, Mr. Bishnoi said higher production of value-added steel and better leveraging of price over mild steel had boosted RINL profit by 42 per cent in 2007-08, when the net profit touched Rs. 1,943 crore on a turnover of Rs. 10,433 crore.

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