Modi govt’s decision to dissolve SAIL’s Raw Materials Division aimed at selling prized mines to corporates?

The decision of top management of the Steel Authority of India (SAIL) to close down its Raw Materials Division (RMD) Head Office in Kolkata is a bolt from the blue for 400 and odd direct and indirect staffers in Kolkata at a time when everyone is panicked about the COVID-19 pandemic.

Incidentally, it was the Steel Executives’ Federation of India (SEFI) general secretary and Rourkela Steel Plant Association Executives’ association president Bimal Bisi who disclosed the decision of the SAIL brass to dismantle the RMD headquarters in Kolkata. The logic (rather alibi) is that it is far away from its captives mines and hence it is a ‘white elephant’.

The first hint of closure of RMD was abolition of the post of director (Raw Materials & Logistics) in August 2020. After the end of tenure of Vivek Gupta as director (RM & L) in July 2020, the post remained vacant and unfilled. In other words, RMD has been headless since August 2020.

Staffers of RMD apart, several top officials at the level of general managers – existing and superannuated – think it is time for the West Bengal chief minister Mamata Banerjee to chip in and write to the PM asking the latter to reverse the decision.

Although the finance minister of West Bengal Amit Mitra has written a letter to the steel minister Dharmendra Pradhan, the latter is not empowered to do anything. It is for the CM to assert that RMD, set up in 1989, has been one up in performance steadily, thereby proving its role as an apex coordinating and policy-framing body without which scattered operational units like mines couldn’t function optimally.

Between January and May 1990, captive mines of the integrated steel plants in the eastern region – IISCO, the Durgapur Steel Plant, Rourkela Steel Plant and Bokaro Steel Plant – were transferred to the RMD, which became fully operational by June 1990.

The management of captive mines of IISCO had to be vested in the division through a power of attorney, an arrangement that continued for almost a decade. For reasons of logistics, the captive mines of the Bhilai Steel Plant were not brought under the new division.

In course of time, RMD proved its mettle through building up of iron ore security for the four eastern-sector steel plants of SAIL. Furthermore, Indian iron ore mines are known the world over for highest ferrous content. Which is why the plan for dissolving the RMD office in Kolkata looks inexplicable, if not irrational.

The NDA government at the Centre has earned the infamy of selling national wealth in practice at dirt cheap price to select few industrial groups. The Centre has chalked out a strategy to sell steel plants of SAIL. The privatisation of Navratna company, Rashtriya Ispat Nigam Limited, also known as the Visakhapatnam Steel Plant is on the cards but the plan has hit road blocks.

Apart from the RINL workers on the war path against the move, the Andhra Pradesh legislative assembly expressed active solidarity with workers through a unanimously passed resolution opposing the Modi government’s proposal to privatise RINL.

RMD looks after 15 mines of basic raw materials spread out in the states of West Bengal, Jharkhand, Odisha and Madhya Pradesh to cater to the needs of steel plants of SAIL, whose veterans smell a rat in the decision of closure of RMD that has also sent down an ominous message to about three thousand miners, field executives and employees as the hidden motive behind this step is to sell out the mines in phases as no corporate group has the huge investible fund needed to buy all the mines even for a song.

“The decision cannot have been taken by the SAIL board of directors, but a mandate from the Union Minister of Steel Dharmendra Pradhan who took the orders from the Prime Minister Narendra Modi. But the decision is not only foolhardy but suicidal for national steel industry and economy,” said a former executive director, SAIL.

The market price of iron ore of the quality of RMD-owned mines is on an average five times we sell. Once these are privatised, they will become gold mines for corporate biggies, assert a few techies among the SEFI members. All this is due to consistent efforts in ore beneficiation, and judicious blending of iron ore, aside from appropriate logistic coordination lower transportation cost and centralised financial control. Little wonder, RMD contributes significantly to the SAIL’s balance sheet.

A lot of thinking was behind the creation of RMD, mainly the specific purpose of meeting future iron ore requirement of SAIL and to provide proper care and medical facility to poor Adivasis working in mines. The purpose met with success since purchase of iron ore, a major cost component, becomes zero due to formation of RMD while hot metal production in steel plants rose vertically since 1990.

And all the plants underwent capacity expansion, thanks to assured supply of iron ore with RMD functioning as surety. For all this, SAIL did not have to procure iron ore externally.

Will SAIL’s techno-commercial viability remain unaffected sans captive mines? That is the billion dollar question.

(IPA Service)

Views are personal