SHIVAMOGGA: Minister of Steel Jyotiraditya Scindia on Monday informed the Rajya Sabha that Visvesvaraya Iron and Steel Limited (VISL) in Bhadravathi will be closed due to unavailability of a captive iron ore mine, high cost and low volume of production due to obsolete technology, highly competitive alloy steel market and other factors.
Replying to a starred question from Rajya Sabha member Sanjay Singh if the Steel Authority of India Limited (SAIL) is closing many of its units, Scindia replied that SAIL is closing only VISL in accordance with the decision of the central government.
Taking a jibe at the Centre, Rajya Sabha member Jairam Ramesh said that private steel companies have mines in the state but not SAIL’s VISL. “It’s amazing that private steel companies have mines in the state but not SAIL! This is despite Bhadravati being less than 250 km away from Ballari. In fact, mining lease was allocated in October 2011 but Modi Sarkar did nothing (sic),” he tweeted.
“The government accorded in-principle approval for strategic disinvestment of VISP in October 2016. As the shortlisted bidders have expressed their inability to participate further in strategic disinvestment, the competent authority has approved the annulment of expression of interest for disinvestment. The process of closure of VISL has been initiated,” Scindia said.
Listing out the reasons for the decision, he said there is high cost and low volume of production due to obsolete technology, high cost of raw materials such as coke and iron ore, highly competitive alloy steel market and the lack of operational captive iron ore mine in Karnataka.
Replying to another starred question by GC Chandrashekhar, he said efforts have been made for the allocation of a mining lease of 140 hectares of iron ore mines in the Ballari district, but it could not be made operational as it was entangled in litigation. The total investment in the plant and machinery has been Rs 316 crore after VISL became a subsidiary of SAIL, he said.