Neelachal Ispat Nigam limited (NINL) has received permission from the Indian government to restart operations at captive iron ore mines and sell in the open market up to 25pc of the annual production for a period of one year or until disinvestment of the company, whichever is earlier, according to media reports.
NINL’s new Managing Director, RK Jha said that to improve the cash flow situation, the company would restart its blast furnace soon, which had been idled in March 2020.
The company has been facing severe financial crunch since the Cabinet approved its disinvestment in January 2020.
The reason behind this decision is the drastic reduction in production of iron ore in the country due to various reasons, an order from the Ministry of Mines dated January 5 said. The move will also help in reducing the financial distress of the company.
NINL is a 1.1 mn mt integrated iron and steel plant based in Kalinganagar, Odisha. It had been granted a mining lease in 1999. However, this public sector undertaking’s captive iron ore mines had not been operational.
On November 10, 2020, the Ministry of Commerce and Industry and the Ministry of Steel and Mines decided to secure permission for NINL for commercial operation of its captive mines till disinvestment is completed.