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Disinvestment: Govt permits NINL to operationalise its captive mines, sell iron ore in open market

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  • The Centre has granted permission to NINL to sell up to 25 percent of the annual iron ore production for a period of one year or until disinvestment of the company

  • NINL employees have finally received a month’s salary after a period of nine months, said Ajit Kumar Pradhan, General Secretary of NINL Executives Association

New Delhi: For the first time in its history, disinvestment-bound Neelanchal Ispat Nigam Ltd (NINL) is set to operationalise its captive iron ore mines and sell the produce in the open market as it has received a nod from the Central government in this regard, an official order accessed by PSU Watch showed. The order issued by the Ministry of Mines, dated January 5, noted that there has been a drastic reduction in production of iron ore in the country in the wake of the Covid-19 pandemic and granted permission to NINL to sell up to 25 percent of the annual iron ore production for a period of one year or until disinvestment of the company, whichever is earlier.

“… there has been drastic reduction in production of iron ore in the country due to various reasons as is evident from the fact that in the year 2020-21 up to September, 2021 only 76 million tonnes of iron ore was produced in the country as compared to 111 million tonnes of iron ore production in the corresponding year of the last year,” said the order.

“Therefore, in order to maintain supply of iron ore in face of shortfall of production of iron ore in the country and also to help to reduce the financial distress of NINL, the Central Government in exercise of the powers conferred under section 20A of the MMDR Act, 1957 hereby grants permission to sell up to 25 percent of the annual iron ore production of NINL as per the Mine Development and Production Agreement executed by the company for a period of one year or till the completion of disinvestment of the company, whichever is earlier, under intimation to the State Government and Indian Bureau of Mines,” the order added.

NINL employees receive a month’s salary after 9 months

Speaking to PSU Watch, NINL Executives Association General Secretary Ajit Kumar Pradhan said that the employees have finally received a month’s salary after a period of nine months. Welcoming the government’s decision to allow NINL to operationalise its captive mines, Pradhan said, “We thank Commerce and Industry Minister Piyush Goyal and Steel Minister Dharmendra Pradhan for taking the initiative and making this happen. It is a very big and important decision and it will alleviate some of the financial stress facing NINL.”

ALSO READ: Not paid salaries for 9 months, employee unions challenge NINL disinvestment in Orissa HC

“Since all the present share holders are from State and Cental PSUs for larger interest of the country and organisation, NINL should be merged with any steel PSUs — SAIL/ RINL/ NMDC — who are in the business of mines and steel making. After the merger NINL will play a major role in the economic activity of the country as well as bringing industrial development in the region,” he added.

The backdrop

NINL is a 1.1 MTPA integrated iron and steel plant in Kalinganagar, Odisha. It had been granted a mining lease in the year 1999. However, the steel PSU’s captive iron ore mines had not been operational until now. At a meeting held on November 10, 2020, it was decided that Ministry of Commerce and Industry will coordinate with the Ministry of Steel and Mines to secure permission for NINL for commercial operation of its captive mines till disinvestment gets completed.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram. Join PSU Watch Channel in your Telegram and stay updated)

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