Indian state-owned steel producer Rashtriya Ispat Nigam Limited (RINL) has been granted an iron ore mining lease across 1,043 hectares of land with estimated reserves of 300 million mt in the central Indian province of Rajasthan, as SteelOrbis has learned from India's Steel Ministry officials on Friday, June 1.
However, the recently discovered iron ore reserves have been determined by the Geological Survey of India to be low grade magnetite with a 45-55 percent Fe content which would require RINL to install separation and pelletizing plants at its steel production facility, the officials said.
RINL, popularly known as ‘Vizag Steel Plant' located in southern Indian port town of Vishakhapatnam, was the only state-owned steel producer which did not have a captive iron ore mine and procured its raw material from NMDC Limited, the largest Indian iron ore miner.
The access to the new reserves will ensure raw material security for RINL which is carrying out an expansion plan to increase steelmaking capacity to 6.3 million mt per year from the current 3 million mt per year, entailing an investment of $2.5 billion, as RINL officials told SteelOrbis. The expansion project is expected to be completed by the third quarter of the current calendar year. Meanwhile, the new timeline for the second phase expansion is yet to be announced. The second phase of the expansion project to increase the annual capacity to 12 million mt was put on hold since the company did not have a captive source of raw materials.
According to the company, RINL may increase its competitiveness by having its own captive iron ore sources, given that its peers, which have their own iron ore mines, have an edge in terms of cost competitiveness of about $194/mt for finished steel products.