Lack of captive mines pushed Vizag Steel Plant into debt: Pradhan

Union Minister of Steel Dharmendra Pradhan has admitted that lack of captive mines for the Visakhapatnam Steel Plant made it debt ridden. He answered the question of YSRCP Parliamentary Party leader Vijay Sai Reddy on his request to allocate captive mines to the steel plant.

Pradhan said, “RINL procures iron ore from open market at the market price in the absence of allocation of any captive mine. This is one of the factors among other reasons for losses incurred by RINL. RINL has requested various state governments like Odisha, Chhattisgarh and Andhra Pradesh for recommending reservation of iron ore deposit under Section 17A(2A) of MMDR Act, 2015 to the Ministry of Mines, Govt. of India. Ministry of Steel has also requested the Government of Odisha for reservation of an iron ore block in favour of RINL.”

Vijay Sai Reddy said, “VSP is an emotional and sentimental issue and the entire state has been opposing the move. It is a matter of great concern for the people of AP, employees of RINL and other stakeholders, where 32 lives were laid down to get VSP. Apart from adopting a resolution in the state Assembly, they will continue their fight till the Centre reverts its decision in this regard. The Chief Minister has shown alternative ways and proposed to allocate captive mines and explore equity options, where the public can make a purchase instead of a private organisation.”

Going into the details, he stated that the plant performed well between 2002 to 2015, earning profits, but suddenly there was a downfall due to the economic crisis from 2015 onwards, resulting in a pile of debt and losses. Recalling the suggestions put by the Chief Minister, he said that the plant is dependent on NMDC mines and due to the lack of captive mines, Rs 3,470 crore is being burdened on RINL; allotting captive mines would reduce input costs.

On the other hand, agitations for the protection of the Vizag Steel Plant from the disinvestment move by the Central government have intensified after Union Minister for Finance Nirmala Sitharaman’s statement of total privatisation of the steel plant. Workers unions served a strike notice on March 11 and strike may take place on any day after March 25. Thousands of workers and displaced persons of the steel plant led by trade unions laid siege on the steel plant administrative building. It may be recalled that plant workers under the banner of Visakha Ukku Parirakshana Committee have been conducting agitation for the past 26 days, including relay hunger strikes.