RINL looks at Rs 400 cr investment in US, Australia, Canada mines

Visakhapatnam, May 19 (UNI) Even as Prime Minister Manmohan Singh sets Rashtriya Ispat Nigam Limited (RINL) on a Rs 8692-crore expansion mode to 'nearly double' its capacity at 6.3 million tonnes here, RINL is looking at acquiring a share in iron ore and coal mines in Australia, United States and Canada.

RINL intends to spend about Rs 400 crore for a equity in iron ore mines abroad and has appointed a consultant. It was also considering investing about Rs 400 crore on the pellitisation plant to be set up at Bailadilla in Chhattisgarh, jointly with National Minerals Development Company (NMDC), another public sector unit (PSU), to improve its feed stock efficiency at RINL here.

Alongside, RINL has entered into a Memorandum of Understanding with NMDC to increase iron ore supply by 6.3 million tonnes to 10 million tonnes for the Visakhaptnam Steel Plant (VSP), Company's Chairman and Managing Director Y Siva Sagar Rao said during interaction with the media ahead of Prime Minister Manmohan Singh laying the foundation here on May 20 for the RINL expansion.

Even as RINL was offered a coking coal mining block in Jharkhand, which it intends to blend with the low ash coal being imported, the steel plant is looking for captive mines.

As the mining cost is around only Rs 400 per tonne for which RINL has been paying Rs 1200 per tonne, the Company has applied for mines in Orissa and Chhattisgarh. It was also planning acquisition of captive mines in India and abroad through joint ventures.

The RINL's Visakhapatnam Steel Plant (VSP) will be placing order during the current year for equipment valued at around Rs 8000 crore for the two-stage expansion programmes, initially at 36-42 months and the second phase another 12 months later.

RINL, which will fund the expansion at 1:1 debt-equity has already kept Rs 5300 crore from internal accruals ready for funding the expansion. ''During 2006-2007, we will be spending Rs 1000 crore on the expansion from internal accruals,'' Mr Rao said adding that it has already sent out Expression of Interest (EoI) for two foreign institutions for funding the debt portion of the expansion, likely to be finance at floating rate of interest.

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