Rashtriya Ispat Nigam Limited (RINL), one of India's leading steel producers, has faced a major challenge as its Vizag Steel Plant (VSP), which has a crude steel capacity of around 5.27 million tons per annum and produces various flat and long steel products, is facing a shortage of coking coal.
This crisis has arisen due to disruptions in coal supply from Adani's Gangavaram port, where workers are currently on strike. The VSP primarily relies on coking coal imports from Australia, which are delivered to Gangavaram port. Presently, there are approximately 220,000-225,000 tonnes of RINL's coking coal inventory at the port.
To address the crisis and ensure uninterrupted operations, RINL is exploring various measures. These include rerouting shipments to Vizag Port, pursuing a commodity loan for 50,000 tonnes of coal, and initiating a global tender to procure an additional 150,000 tonnes of coal urgently. However, more decisive action is necessary to resolve the coal shortage and safeguard the plant's operations against further disruptions.
According to an industry insider, the plant's operations have plummeted by 80% due to the shortage, and prolonged closure of coke ovens could take several months to restart operations. Experts in the industry estimate that failure to resolve the issue promptly and resulting shutdown of plant operations could lead to a significant loss of INR 20,000 crore (USD 240 million) for the company.
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