Financially-stressed government-owned Indian steel producer Rashtriya Ispat Nigam Limited (RINL) has signed a long-term agreement (LTA) with NMDC Limited for supply of iron ore and to ensure operational viability through raw material security, company sources said on Friday, February 28.
The LTA with government-run iron ore miner NMDC Limited comes close on the heels of the Indian government sanctioning a $1.31 billion package for the financial rehabilitation of debt-ridden RINL, the sources said.
The iron ore supply agreement is critical for the operational viability of RINL as it is the only government-run mill which does not have captive raw material sources.
RINL has three blast furnaces with a combined capacity of 7.3 million mt located at the southern port town of Vishakhapatnam but is currently closed down owing to a cash shortage for buying raw materials.
When operational, RINL required 600,000 mt of iron ore to achieve optimal crude steel output.