By Bizodisha Bureau, Bhubaneswar, July 3, 2018: Tata Steel has sought five million ton per annum iron ore from the state owned Odisha Mining Corporation (OMC) to ensure steady flow of iron ore to the Bhushan Steel unit and its Kalinganagar unit, sources said.

Tatas have recently taken over Bhushan Steel Ltd, located at Meramandali in Odisha, nearly 150 km from its Kalinganagar Greenfield plant, with a capacity of 5.6 million tonnes per annum (mtpa).

Bamnipal Steel Limited (BNPL), a wholly-owned subsidiary of Tata Steel has successfully completed the acquisition of controlling stake of 72.65 per cent in Bhushan Steel Ltd (BSL) in accordance with the approved Resolution Plan under the Corporate Insolvency Resolution Process (CIRP) of the Insolvency and Bankruptcy Code (IBC), 2016.

“The investment from BNPL in BSL has been done through a combination of equity of Rs 1.58 billion and inter-corporate loan of Rs 3.49 billion. The acquisition is being financed through a combination of external bridge loan of Rs 165 billion availed by BNPL and balance amount through investment by Tata Steel in BNPL. The bridge loan availed by BNPL is expected to be replaced by debt raised at BSL over time”, Tata Steel had announced in a previous statement.

The leading steel maker’s captive iron ore resources in Odisha primarily feed its Jamshedpur plant.

OMC sources hinted at an application filed by Tata Steel for sourcing five mtpa iron ore from OMC. “The proposal will go to the allotment committee chaired by principal secretary (industries) for scrutiny,” said an official.

Under the long-term linkage policy, 70 per cent of the iron ore mined by OMC is offered to end use industries. OMC closed 2017-18 with an iron ore output of eight million tonnes. The public sector miner is hopeful of inching closer to its installed capacity of 11 million tonnes, through ramp up of its flagship Gandhamardhan operations.

“After the Bhushan Steel acquisition, we are now in the process of settling down. We are considering many options for iron ore and we are open to buy from external sources”, said a Tata Steel source.