Posted on 24 Apr 2024
Indian steel major Rashtriya Ispat Nigam Limited (RINL) is facing a critical challenge as its Vizag Steel Plant (VSP) grapples with a severe coking coal crisis.
The crisis has emerged due to disruptions in coal supply from Adani’s Gangavaram port, whose workers have gone on strike.
The majority of RINL's coking coal requirement for its Vizag plant is sourced from Australia, with shipments arriving at Gangavaram port, notes Kallanish. There is currently approximately 220,000-225,000 tonnes of RINL’s coking coal stocked at the port, informed sources note.
The steelmaker is actively seeking solutions to mitigate the impact and ensure continuity of operations. These measures include redirecting ships to Vizag Port, seeking a commodity loan of 50,000t of coal, and initiating a global tender for the emergency procurement of 150,000t of coal.
However, more action is needed to address the coal crisis and protect the plant's operations from further setbacks.
“The plant’s operations have dropped by 80% due to the coking coal shortage and, if the issue is not resolved, coke ovens will shut, and these take many months to restart operations,” says an industry source familiar with the matter.
Industry experts estimate that if the issue is not resolved promptly and plant operations are shut, the company could face a substantial loss of INR 20,000 crore ($240 million).
VSP’s crude steel capacity stands at around 5.27 million tonnes/year and the company produces a variety of products, including flat and long products.
Source:Kallanish
