Rashtriya Ispat Nigam (RINL), a cornerstone of India's steel industry, finds itself mired in operational turmoil as a storm of challenges threatens its production capacity. With raw material shortages already slashing production by 60 per cent, the company faces a new setback in the form of an ongoing strike at the Adani-owned Gangavaram Port.
The strike has magnified RINL's struggles, leaving vital coking coal and limestone, valued at Rs 650 crore, stranded at the port. These materials are indispensable for steel production, and their absence exacerbates an already precarious situation for the steelmaker.
According to reports, despite efforts to secure commodity loans and explore alternative ports, current stocks are dwindling rapidly, with reserves now lasting only a few days. Borrowing for additional raw materials is not a viable option amidst the looming spectre of colossal debt. The Ministry has ruled out recapitalisation for RINL, and the steel-maker finds itself on the Centre’s disinvestment radar.
Steel Ministry sources conveyed concerns, stating, "If the situation is not resolved, there will be an imminent shutdown that threatens extensive damage and exorbitant restoration costs."
RINL has made appeals to the Andhra Pradesh government for intervention and has resorted to legal measures to rectify the raw materials supply chain. The Steel Ministry has also been briefed on the severity of the situation.
Operations at RINL have been significantly curtailed, with dramatic reductions in coke oven pushings and hot metal production. Daily coke oven pushings have plummeted to 140 from 320, marking a 56 per cent decline, while hot metal production has been slashed to 5,600 tonnes per day from around 14,000 tonnes.
The coal awaiting evacuation at Gangavaram Port includes 142,000 tonnes of hard coking coal, 90,000 tonnes of pulverised coal injection, and approximately 82,000 tonnes of limestone. Vessels carrying soft coking coal have been diverted, exacerbating the scarcity of essential materials.
The absence of coking coal not only disrupts production but also poses significant safety risks, including gas leakages and blasts, as highlighted by the Ministry official.
Disruptions at AGPL have halted coal transfers, leaving over 314,000 tonnes stranded. Vessels carrying soft coking coal have been redirected, further complicating the supply chain.
Alternative berthing arrangements at Vizag Port introduce logistical challenges, elongating coal transfer times significantly. What was once a 20-minute transfer time from Gangavaram Port to the plant via a conveyor belt has now stretched to "at least 24 hours," owing to constraints such as rakes availability and berthing spaces.
RINL's predicament underscores the fragility of India's industrial ecosystem, highlighting the urgent need for swift resolution to prevent far-reaching economic repercussions.
