The Hindu : Andhra Pradesh / Visakhapatnam News : Grant of iron ore lease in Prakasam to RINL sought

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Wednesday, Apr 27, 2011
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Andhra Pradesh - Visakhapatnam

Grant of iron ore lease in Prakasam to RINL sought

Special Correspondent

CITU for scrapping of lease given to APMDC-Gimpex

Gimpex is not an end-user, say a union leader
RINL spending 47 per cent production cost on raw material

VISAKHAPATNAM: Centre of Indian Trade Unions (CITU) on Tuesday demanded cancellation of lease to mine iron ore in Prakasam district to a joint venture formed by APMDC with Gimpex Limited, a private company and allot the same to Rashtriya Ispat Nigam Limited (RINL).

After inspecting the mining sites at Korejedu, Marlapadu, Yerajarla, Surveyreddypalem, Kanduluru and Yemarla in Prakasam, CITU-affiliated Steel Plant Workers' Union honorary president Ch. Narsinga Rao, president J. Ayodhyaram and general secretary Y.T. Dasu said that RINL, which was one of the applicants for low-grade iron ore in Prakasam should be granted the mining lease.

They said Gimpex was not an end-user and had failed to commence work though the lease was granted about four years ago. On the other hand, RINL's plea for granting lease to meet the raw material requirement of Visakhapatnam Steel Plant was rejected under the pretext that the earlier applicant (APMDC-Gimpex) had been granted the lease.

The team members said the joint venture had not yet started any work in the mining sites and pointed out that the mining areas were in fact reserved for public sector steel industries vide GO Ms. No. 428 dated June 7, 1972.

Mr. Narsinga Rao, who is district secretary of CPI (M), said RINL was the end-user and capable of undertaking mining on its own unlike APMDC which wanted to benefit Gimpex to mine and sell it to others. RINL is the only major steel producer in the country without having captive mines.

He said Gimpex was a trading company but not an iron ore consumer itself. Hence, he said the low grade iron ore lease on an area of 1,307 hectares should be allotted to RINL so as to use it for pellets and subsequently as raw material for producing steel.

Stating that the Congress Government was not showing interest in providing captive mines to RINL to have raw material security, he said RINL had paid Rs.20,808 crore in the form of various taxes to the government since its inception.

For want of raw material, the company was paying a heavy amount towards production cost.

He said that RINL was spending 47 per cent of its production cost towards raw material whereas other steel majors in the country were incurring only 15 to 20 per cent as they had their own captive mines.

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