'KIOCL is venturing out for new avenues for sustenance and bottom line growth,' says CMD Malay Chatterjee
Malay Chatterjee, Chairman and Managing Director, KIOCL rues the fact that KIOCL in spite of its contribution has not been considered for mine allotment as KIOCL has established itself as the country’s premier pellet making public sector undertaking along with Kudremukh Mines, but has no captive mines, thereby threatening its long term sustenance.
Talking about KIOCL’s future after the aftermath of closure of Kudremukh mines in 2006 Chatterjee said that “KIOCL was established as the country’s premier pellet making public sector undertaking along with Kudremukh Mines. However, since today KIOCL has no captive mine, its long term sustenance is being threatened. We have aggressively taken up various other business modules to make KIOCL, a vibrant and profit earning central public sector undertaking (CPSU)”.
According to the CMD, KIOCL is a premier Central PSU in the mining sector and has put up the country’s first ever 3.5-mtpa pellet plant and 7.5-mtpa beneficiation plant with a slurry pipeline of 67 km from Kudremukh to Mangalore. It has also demonstrated its expertise in the mining and pelletisation process. In spite of that, Chatterjee says “I fail to understand why KlOCL has so far not been considered for allotment of mines” even in the aftermath of the mining ban. However, they are sure that better sense will prevail and KlOCL will be bailed out of its current crisis.
Status of the mining concession
So far, KIOCL has made 25 mining lease and four prospecting licence applications in the state of Karnataka for allotment of mining assets. Allotment of mining lease at Chikkanayakanahalli, Tumkur District has been cleared by the government of Karnataka. However, KIOCL is still waiting for forest clearance and signing of mining lease in their favour, which is pending since December 2010. KIOCL does not have any mining concessions at Donimalai.
Chatterjee further added “We have been considered for allotment at Ramanadurga deposits in Bellary district which is also pending a decision. We have made 28 mining lease and eight prospecting licence applications all over the country and are hoping for allotment of mines in the states of Karnataka, Jharkhand, Odisha and Andhra Pradesh”.
He also said that the entire mining sector is on the back foot in the state of Karnataka, because of the decision of the apex court. The mining operation in Karnataka is being looked after by the Central Empowered Committee, so it is difficult for us to set a timeline for a decision at our end. KIOCL has applied for mining leases in the states of Karnataka, Odisha, Jharkhand and Andhra Pradesh. Being a Central PSU with core competency and expertise in mining, they are hopeful of getting some mining allotments in the near future.
Prospects in pellet and beneficiation for KIOCL
KIOCL Ltd., the erstwhile Kudremukh Iron Ore Co. Ltd., started as a premier beneficiation and pellet making company and continues to be a frontrunner in that aspect. The role and importance of KIOCL is going to increase exponentially with the setting up of new pellet and beneficiation plants. Currently, KIOCL are in dialogue with sister public sector companies such as NMDC, SAIL and OMDC for setting up of beneficiation and pelletisation plants that will involve a capital expenditure of Rs 10,000 crore in the next three to five years. Nevertheless, the role will also be important and significant in the light of the new MMDR Act. As KIOCL has a 3.5-mtpa pellet plant, it needs around 4 mtpa of iron ore to run it at its rated capacity. However, we are unable to meet the demand because of the logistics issues in sourcing iron ore fines from NMDC’s Baila and Bacheli mines, Chhattisgarh, ore is sold through e-auction. He further added “We are sourcing iron ore fines from NMDC, which is the merchant mining CPSU and the rates are determined by them on monthly pricing basis.”
Diversification plans for KIOCL
KIOCL, being a mine and steel based Public Sector Undertaking (PSU), once played an important role in its core sector in taking forward the process of pelletisation in the country. It is also contemplating opening up some new verticals wherein there are less number of players and ample scope for business, such as e-commerce, solar energy and eco- tourism to name a few. KIOCL, enters into e-commerce business, providing On Premises Data Centre (OPDC) facilities for e-commerce. E-commerce is expected to reduce cost of procurements substantially, bring total transparency and efficiency in transactions and cut off the delays in procurement and sales against conventional tendering.
It is also a partner in prospecting and looking for valuable mining assets abroad along with its sister PSUs. In the past, KIOCL has made some efforts in West Africa for scouting iron ore assets which has not been very encouraging due to size of investment and logistics. However, recently a team from the steel ministry made an effort for scouting mining assets countries such as Brazil, Peru and Chile and KIOCL are very much a member of this consortium which is looking into various aspects of due diligence for acquisition of such assets.
Malay Chatterjee, Chairman and Managing Director, KIOCL rues the fact that KIOCL in spite of its contribution has not been considered for mine allotment as KIOCL has established itself as the country’s premier pellet making public sector undertaking along with Kudremukh Mines, but has no captive mines, thereby threatening its long term sustenance.
Talking about KIOCL’s future after the aftermath of closure of Kudremukh mines in 2006 Chatterjee said that “KIOCL was established as the country’s premier pellet making public sector undertaking along with Kudremukh Mines. However, since today KIOCL has no captive mine, its long term sustenance is being threatened. We have aggressively taken up various other business modules to make KIOCL, a vibrant and profit earning central public sector undertaking (CPSU)”.
According to the CMD, KIOCL is a premier Central PSU in the mining sector and has put up the country’s first ever 3.5-mtpa pellet plant and 7.5-mtpa beneficiation plant with a slurry pipeline of 67 km from Kudremukh to Mangalore. It has also demonstrated its expertise in the mining and pelletisation process. In spite of that, Chatterjee says “I fail to understand why KlOCL has so far not been considered for allotment of mines” even in the aftermath of the mining ban. However, they are sure that better sense will prevail and KlOCL will be bailed out of its current crisis.
Status of the mining concession
So far, KIOCL has made 25 mining lease and four prospecting licence applications in the state of Karnataka for allotment of mining assets. Allotment of mining lease at Chikkanayakanahalli, Tumkur District has been cleared by the government of Karnataka. However, KIOCL is still waiting for forest clearance and signing of mining lease in their favour, which is pending since December 2010. KIOCL does not have any mining concessions at Donimalai.
Chatterjee further added “We have been considered for allotment at Ramanadurga deposits in Bellary district which is also pending a decision. We have made 28 mining lease and eight prospecting licence applications all over the country and are hoping for allotment of mines in the states of Karnataka, Jharkhand, Odisha and Andhra Pradesh”.
He also said that the entire mining sector is on the back foot in the state of Karnataka, because of the decision of the apex court. The mining operation in Karnataka is being looked after by the Central Empowered Committee, so it is difficult for us to set a timeline for a decision at our end. KIOCL has applied for mining leases in the states of Karnataka, Odisha, Jharkhand and Andhra Pradesh. Being a Central PSU with core competency and expertise in mining, they are hopeful of getting some mining allotments in the near future.
Prospects in pellet and beneficiation for KIOCL
KIOCL Ltd., the erstwhile Kudremukh Iron Ore Co. Ltd., started as a premier beneficiation and pellet making company and continues to be a frontrunner in that aspect. The role and importance of KIOCL is going to increase exponentially with the setting up of new pellet and beneficiation plants. Currently, KIOCL are in dialogue with sister public sector companies such as NMDC, SAIL and OMDC for setting up of beneficiation and pelletisation plants that will involve a capital expenditure of Rs 10,000 crore in the next three to five years. Nevertheless, the role will also be important and significant in the light of the new MMDR Act. As KIOCL has a 3.5-mtpa pellet plant, it needs around 4 mtpa of iron ore to run it at its rated capacity. However, we are unable to meet the demand because of the logistics issues in sourcing iron ore fines from NMDC’s Baila and Bacheli mines, Chhattisgarh, ore is sold through e-auction. He further added “We are sourcing iron ore fines from NMDC, which is the merchant mining CPSU and the rates are determined by them on monthly pricing basis.”
Diversification plans for KIOCL
KIOCL, being a mine and steel based Public Sector Undertaking (PSU), once played an important role in its core sector in taking forward the process of pelletisation in the country. It is also contemplating opening up some new verticals wherein there are less number of players and ample scope for business, such as e-commerce, solar energy and eco- tourism to name a few. KIOCL, enters into e-commerce business, providing On Premises Data Centre (OPDC) facilities for e-commerce. E-commerce is expected to reduce cost of procurements substantially, bring total transparency and efficiency in transactions and cut off the delays in procurement and sales against conventional tendering.
It is also a partner in prospecting and looking for valuable mining assets abroad along with its sister PSUs. In the past, KIOCL has made some efforts in West Africa for scouting iron ore assets which has not been very encouraging due to size of investment and logistics. However, recently a team from the steel ministry made an effort for scouting mining assets countries such as Brazil, Peru and Chile and KIOCL are very much a member of this consortium which is looking into various aspects of due diligence for acquisition of such assets.
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