State-owned RINL has signed an agreement with Jindal Steel and Power Ltd (JSPL) for working capital support and raw material supply of up to Rs 900 crore.
RINL Chairman and Managing Director Atul Bhatt in a meeting with representatives of various trade unions informed the company has entered into a memorandum of understanding (MoU) with JSPL for ensuring the needed working capital support or raw material requirement to start its third blast furnace (BF-3).
The blast furnace BF-3 has been closed since January 2021. The re-start of the BF-3 is planned for December 30, 2023 at a capacity of 2 lakh tonnes of hot metal per month, Bhatt said.
Under the arrangement, JSPL will ensure the availability of funds in the form of advance working capital or raw materials required for consistent operation of BF-3 valuing in the range of Rs 800-900 crore, RINL said adding it will supply about 90,000 tonnes of cast blooms every month to JSPL in return.
This initiative will result in a monthly increase in sales turnover of around Rs 500 crore per month and is likely to reduce losses by about 50-100 crores per month, the company statement said.
"The restarting/activation of the 3rd Blast Furnace at RINL is positioned as a strategic move to optimize production capabilities, thereby contributing to the overall improvement of RINL's financial position," Bhatt said.
Rashtriya Ispat Nigam Ltd (RINL), under the Ministry of Steel, is among India's top six steel producing company. There are three blast furnaces of 2.5 MTPA each at its plant located at Visakhapatnam in Andhra Pradesh.