Rashtriya Ispat Nigam Limited's Bird deal still to take flight

VISAKHAPATNAM: Rashtriya Ispat Nigam Limited (the corporate entity of Visakhapatnam Steel Plant) finds itself in a catch-22 situation after acquiring captive iron ore, manganese, limestone and dolomite mines from the public sector Bird Group. The acquisition took place during financial year 2010-11 and was considered to be a strategic move by RINL to get access to supply of raw material used to manufacture steel.As per the deal, two subsidiaries of the Bird Group- Bisra Stone Lime Company (BSLC) and Orissa Minerals Development Company (OMDC) - were made subsidiaries of RINL after the latter purchased them for Rs 316.3 crores. While OMDC a listed company has six high-grade iron ore and manganese mines in its possession, BSLC controls limestone and dolomite mines.
Though it has been about two years since the deal was struck, not a single ton of iron ore has moved in to the RINL stockyard as yet. It now transpires that the lease licence of OMDC granted by the Odisha government has expired. OMDC was started about a century ago, and the lease period of the mines has come to the third lease stage and the government of Odisha has to decide whether to extend it once again.
Sources reveal that there is hectic lobbying in Odisha to give away the mines to Orissa Mining Corporation, a state government owned mining entity that has deep links with POSCO. RINL insiders feel that the steel ministry has to step in to save the steel major from losing out, even after a rightful acquisition.
While on one hand, OMDC is working at a brisk pace to get all the clearances such as pollution, forest and environment and ease out the old and pending litigations, the lease hold ownership of the mines have now surfaced again to add to its problems.