Indian government run steel producer Rashtriya Ispat Nigam Limited is looking to lease 1,400 acres of surplus land available at its steel mill in Vishakhapatnam to iron ore miner NMDC Limited, to raise funds and overcome a working capital shortage, company sources said on Monday, September 4.
The sources said that the lease of the surplus land is expected to fetch RINL an estimated $8.47 million per year as lease rental for a lease tenure of 33 years and enable the 7.3 million mt per year capacity steel mill to overcome its acute working capital shortage.
The steel mill will also likely benefit from the leasing of the land to NMDC Limited as the latter is planning to build an iron ore pellet plant along with a stockyard for iron ore and fines at the land site.
RINL is the only integrated steel mill which does not have any captive iron ore mines and meets its raw material requirements from NMDC Limited’s mines in Chhattisgarh state and sourcing its requirements from the latter’s site next door would enable the steel producer to bring down transportation and logistical costs.
