Malay Chatterjee, an Engineer, Lawyer, an expert in Disaster Mitigation and a thorough gentleman, the charismatic Chairman of KIOCL since July 2012 talks to Core Communique about the company, its future plans and how he wants to chart the destiny of this behemoth so that it may keep its tryst with destiny. Excerpts:
Q1. Mining, beneficiation, pelletisation, blast furnace: KIOCL had it all. Why is the company reduced to running only the pellet plant these days?
KIOCL, being a Premier Central PSU in the mining sector having put up Country’s first ever 3.5 mtpa Pellet Plant and 7.5 mtpa Beneficiation Plant with a slurry pipeline of 67 kms from Kudremukh to Mangalore and demonstrated its prudence in the mining and Pelletisation process. On the aftermath of Hon’ble Supreme Court’s verdict, KIOCL had to suspend its mining operations at Kudremukh w.e.f 01.01.2006. Since then KIOCL has not been considered for allotment of mines.
Blast Furnace unit which was commissioned in 2001, has suspended operations since 2009 as the unit was incurring heavy losses due to high cost of input raw material procured from outside after the closure of mines.
With no captive mine, KIOCL‘s long term sustenance is threatened. In order to keep its Pellet Plant running, KIOCL is sourcing iron ore fines from NMDC’s Baila & Bacheli mines, Chhattisgarh, since Doni mines is closed in the State of Karnataka.
As the Pellet plant situated is neither near to mine head nor close to consumption center, company is incurring huge cost on logistics and is operating with very thin margins. Added to this, the imposition of DBC and Export Duty on its only product, pellet, the export arm of the Company has also been affected. Despite all the odds, the company made a profit of Rs. 40 crores as against Rs. 32 crores last year.
Q2. Sourcing your Ore from NMDC and incurring logistical costs that are prohibitive, how are you managing to fight a battle with the stakes heavily against you? What can the Government do to lend a helping hand?
After the closure of mines at Kudremukh, the Company has been scouting for access to mining assets across India in order to utilize its expertise and surplus workforce earlier involved in mining for gainful utilization.
So far KIOCL has submitted 25 Mining leases and 4 Prospecting license applications in the State of Karnataka for allotment of mining assets. Allotment of mining lease at Chikkanayakanahalli, Tumkur Dist. has been cleared by Govt of Karnataka. However, we are waiting for forest clearance and signing of mining lease in our favour, which is pending since December 2010.
We have been actively considered for allotment at Ramanadurga deposits in Bellary District which is also pending for decision.
Further, we have submitted 28 mining leases and 8 prospecting licenses applications all over the Country and hopefully waiting for allotment of mines in the States of Karnataka, Jharkhand, Odisha and Andhra Pradesh. The Govt. should consider allotment of mining leases to KIOCL for its long term sustenance.
Q3. We have seen some of the worst possible days for the iron ore industry. Is it now the darkest because the dawn is near? How does it look from where you stand?
When it comes to infrastructure, steel has a definite grip and has been projected as a sunrise sector. The traditional sectors such as construction, housing, transportation and other sectors with hi-tech engg such as power generation, petrochemicals , fertilizers all requires steel for which the demand is met with domestic iron ore or pellets.
With the current focus on economic development, encouraging infrastructure projects in the form of roads, flyovers, Metro rail and port facilities would encourage the domestic steel verticals to remain competitive. There is a growing confidence in steel as a reliable, cost and time efficient material.
The steel production capacity is projected to grow to 125.9 million tonnes by 2016-17 and hence utilization of pellets in the steel making will be very essential since the importance of iron ore fines will play a great role in future in steel making.
Iron oxide pellets, an intermediary product between iron ore and steel goes as a major raw material in steel making, and the role of KIOCL in enhancing the production capacity of steel making in the country will be significant.
Q4. Globally, there is a paradigm shift, with optimal utilization of resources, especially mineral resources like iron ore increasingly becoming the buzzword. Does it mean that close to four long decades after it was conceived, KIOCL is now on the verge of keeping its tryst with destiny?
KIOCL had operated Kudremukh mines in the Western Ghats with 22.5 MTPA ROM and 7.5 MTPA Beneficiation plant with 67 KM slurry pipeline with state of the art technology was practiced keeping in view the ecological and environmental issues in concern. The activities came to halt w.e.f 1.01.2006 consequent to direction of Apex Court.
In a broader view, out of the 28.52 billion tons of iron ore reserves in India, 1/3rd of the reserves are locked in Western Ghats. Off late on the environmental grounds, the existence of KIOCL has become a threat. The only alternative is adopting latest technology and other measures that will allow us to take the ore out, while maintaining the ecological system in and around the National Park. Process is on to study the underground mining technology of M/s LKAB, Sweden and adopt the same for mining without disturbing the ecology, flora and fauna of the area.
Q5. Where do you see KIOCL in the near future? What are your plans?
KIOCL Ltd., the erstwhile Kudremukh Iron Ore Co. Ltd., was started as a premier mining, beneficiation and pellet making company. The competency and expertise of KIOCL in the country is for Pelletization and beneficiation and it is currently still the front runner.
KIOCL has recently signed a MoU with M/s APMDC for exploration and exploitation of iron ore deposits in Nemakal village of Ananthapur District in the State of Andhra Pradesh which will enable Company to regain its lost identity as a mining PSU.
The Company with its expert workforce and expertise is venturing out to a business vertical for taking up Operation & Maintenance contract on standalone Beneficiation and Pelletization plants that will augment the Pelletization programme in the Country. Today there is lack of O & M operators for Pellet plant in the country and with our decades of expertise, there is no dearth in this field.
Currently, Company is in dialogue with sister public sector companies such as NMDC, SAIL and OMDC for setting up of beneficiation and Pelletization plants at their mine heads utilizing low grade ore.
Company is also contemplating on opening up new verticals wherein there are less number of players and ample scope for business for one and all such as e-commerce, solar energy, eco- tourism, project management consultancy to name a few.
Company intends to enter into a joint venture (JV) with Steel Authority of India (SAIL) soon for setting up a 3.3 MTPA Beneficiation and 2.0 MTPA pellet plant at Rourkela. While KIOCL fund the project from its own resources, SAIL, which will buy the entire production, will supply iron ore to the plant from its mines in Gua and Bolani mines. The KIOCL has calculated its return on investment (RoI) from this project at 19 percent.
Q6. Anything that you would like to communicate to our readers?
Every Industry goes through a cycle of ups and downs “boom and bust” which is unpredictable. Biggest challenge is that every Industry has to foresee and overcome the barriers in this cycle. In its hay days, KIOCL has not diversified into different areas except setting up of Pelletization and Blast Furnace unit for production of value added products. In the absence of captive mines, company is now all set to diversify in various potential areas and is in the path of re-inventing itself.
For More Information Contact: www.kioclltd.in