Parliamentary panel asks government to allot captive iron ore blocks to RINL

NEW DELHI: A Parliamentary panel "strongly" reiterated its recommendation to the government to allot iron ore blocks to state-run steel major RINL to help it achieve the planned capacity addition of 20 million tonne (MT).
The Parliamentary Standing Committee on Coal and Steel, chaired by Rakesh Singh, also expressed "concern" on Steel Ministry being silent on steps taken by state-owned consultant MECON to improve its performance despite fall in profit.

The committee acknowledged that the plan of Rashtriya Ispat Nigam Ltd (RINL) for expansion of its steel capacity by up to 20 MT has been hit due to lack of raw material security.

Being one of the only public sector steel plant without captive iron ore mines till now, RINL has been incurring about 60 per cent of expenditure on raw material while other major producers are incurring 31-44 per cent cost on raw material, it added.

"While acknowledging that RINL being the only public sector steel plant without captive iron ore mines, the committee strongly reiterate their recommendation regarding allotment of iron ore blocks to RINL for ensuring that it gets the raw material for its planned capacity expansion of 20 MT," the panel said.

On decline in profits of MECON, the committee observed that the state-run entity attributed the decline in its profit for the three years beginning 2011-12 due to economic slowdown, ban on iron ore mining that resulted in delay in project implementation.

MECON added that profits were also hit on account of non materialising of expected projects and uncertainty in coal availability among others.

MECON's profit declined to Rs 101.02 crore in 2012-13 from Rs 136.36 crore in 2011-12. It nosedived to Rs 18.77 crore in 2013-14.

The panel said it was "dismayed" to note that MECON's profit in 2013-14 got reduced by "7 times the profit in 2011-2 and is only 1/5 of the profit during 2012-13."

"The committee are concerned to note that although the Ministry (Steel) in their action taken report have mentioned the major reasons for slump in profits of MECON..., the reply is silent about the steps taken by MECON to improve its performance," the panel said.

The committee said the public sector undertaking should take advantage of the "conducive atmosphere" being created in India after passage of the Mines and Mineral (Development & Regulation) Amendment Act, 2015 and the Coal Mines (Special Provisions) Act, 2015 to improve its performance.