India's Rungta Group Forays into Cement Manufacturing

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Researched by Industrial Info Resources (Sugar Land, Texas)--Rungta Mines Limited (RML) (Singhbhum, Jharkhand) has announced plans to develop a cement manufacturing plant in Orissa. RML, the flagship company of S R Rungta Group, has been primarily involved in iron ore mining and steel production ventures. In an effort to diversify the parent group's businesses, RML has proposed construction of a cement plant with a production capacity of 1 million tons per year, with an estimated investment of $123.14 million.

RML is holding talks with the state government of Orissa for allocation of limestone blocks for the project, which is still in its feasibility stage. Limestone is the key raw material required for cement production, with about 1.5 tons of limestone consumed for every ton of cement output. Funds for the cement plant are expected to be sourced from internal accruals, as well as debt instruments.

According to RML sources, the mining and metal production sectors will continue to be the primary focus of the company. RML is currently involved in two steel projects, one each at Jharkhand and Orissa. The Jharkhand steel plant will have a production capacity of 500,000 tons of steel per year, while the plant at Orissa will be capable of producing 2 million tons per year. Both plants will produce long iron products, catering specifically to the construction sector. The plants are now partially operational, with sponge iron production already under way. In addition to the main plant infrastructure, each of these sites will house a 40-megawatt captive power plant to meet their power requirements. Both of these ventures are expected to commence full-scale operations in the next three to four years.

Besides these two ventures, RML is also planning to revive another 2-million-ton-per-year steel plant in Orissa, which has been dormant for the last five years. The firm had signed a memorandum of understanding with Orissa in 2005 to set up a 2-million-ton-per-year steel plant at a cost of $467 million. The proposed capacity was to be achieved by means of two 1-million-ton plants located at Jharbandh in Orissa's Dhenkanal district and Kamando in Orissa's Sundergarh district. However, hardly any progress was made due to unavailability of coal linkages. Land acquisition for the venture was only partially completed; to date, RML has procured 560 acres out of the total required area of 721 acres.

While recently attempting to construct a boundary wall at its premises, the company faced stiff resistance from affected villagers, who are demanding a better rehabilitation package. A memorandum of understanding to this effect has been submitted to the district collector. It is also expected that a meeting of the Rehabilitation and Peripheral Development Advisory Committee will be convened to reconsider several factors, such as the need for conservation of natural water sources and water bodies in the region; valuation of land, with a focus on upward revision; and a better compensation package, before RML proceeds with its proposed construction activities.

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