Indian iron ore pellet producer KIOCL Limited will commence supplies to domestic steelmaker Rashtriya Ispat Nigam Limited (RINL) ensuring raw material security to the latter, a ministry of steel statement said on Tuesday, August 19.
The ministry said that the agreement for raw material supplies between the two government-run companies would give KIOCL Limited a large marketing opportunity and assured sales, while RINL would receive assured supplies at competitive pricing.
KIOCL plans to supply at least 2 million mt per year of iron ore pellet to RINL, from its 3 million mt pellet plant in the southern town of Mangalore.
The move to sell in the domestic market comes close on the heels of KIOCL Limited forsaking its status as a 100 percent export-oriented unit. Under the export scheme in question, manufacturing units were offered certain incentives to sell larger parts of outputs overseas and were only permitted limited sales in the domestic market.
By giving up its status as a 100 percent export-oriented unit, the agreement with RINL will offer KIOCL a ready market for its output after exiting exports, industry sources said.