RINL’s operational woes worsen; strike at Gangavaram Port leaves coal supply stranded
RINL (Rashtriya Ispat Nigam Ltd.), the State-owned steel major and one of the rare long-steel makers in the country, is in a tight corner, grappling with severe operational constraints.
Raw material shortages have slashed its production capacity by 60% and only one of its three blast furnaces is currently operating.
The ongoing strike at Adani-owned Gangavaram Port has further exacerbated the company’s struggles, leaving crucial coking coal and limestone worth ₹650 crore stranded. Coal and limestone are key steel-making feedstock.
‘Stocks fast dwindling’
Despite attempts to secure commodity loans and explore alternative ports, current stocks are dwindling fast and are currently “at a few days”.
With the spectre of colossal debt looming large, borrowing for additional raw materials is “not an immediate option”.
The Ministry had earlier ruled out a recapitalisation of RINL, and the steel-maker is on the Centre’s disinvestment radar.
“If the situation is not resolved, there will be an imminent shutdown that threatens extensive damage and exorbitant restoration costs,” a Steel Ministry o¦cial told businessline.
RINL has approached the Andhra government for intervention and has also taken legal action to get its raw materials supply on track. The Steel Ministry has reportedly been apprised, too.
Curtailed operations
Operations are forcefully curtailed, dramatically reducing coke oven pushings and hot-metal production.
The coke oven pushings per day were brought down to 140, down 56% from 320 pushings, and the hot-metal production was brought down to 5,600 tonne per day from about 14,000 tonne a day.
Coal awaiting evacuation at Gangavaram includes 142,000 tonne of hard coking coal, 90,000 tonne of pulverised coal injection and about 82,000 tonne of limestone.
The typical blend of coking coal is about 5070% hard coking coal, 3040% soft coking coal and another 10-20% indigenous coking coal.
The average daily requirement of coal was about 12,000 tonne for normal production, which included about 8,000 tonne of hard coking coal (HCC), 2,500 tonne of soft coking coal (SCC) and 1,500 tonne of indigenous coal .
“The absence of coking coal jeopardizes equipment and safety, risking gas leakages and blasts,” the Ministry o¦cial said.
In 2014, RINL entered into a 15-year contract with Adani Gangavaram Port Ltd (AGPL), formerly GPL (Gangavaram Port Ltd.), to facilitate the handling of imported raw materials.
Steel Ministry had earlier ruled out recapitalisation of RINL and it is on disinvestment radar
Logistics wall
The disruption at AGPL has halted coal transfer, leaving more than 314,000 tonne stranded, while vessels carrying soft coking coal are diverted, exacerbating the scarcity.
Alternative berthing arrangements at Vizag Port bring along logistics issues, including elongating coal transfer times.
A 20-minute transfer time from Gangavaram port to the plant through a conveyor belt now increases to “at least 24 hours” in view of the availability of rakes, berthing spaces, etc.
(The writer is with The Hindu businessline)