In an exclusive interview with ilouge Media, Shri T Saminathan, the Chairman and Managing Director (CMD) of KIOCL Limited, shared insights from his remarkable 38-year career in the mining industry. As he approaches retirement, Saminathan delves into the technological innovations and strategic decisions that have defined KIOCL’s success. He also highlights the company’s resilience in overcoming challenges, and the recent pivot towards sustainable practices, ensuring a brighter future for the organization.
Can you share your professional journey and experience working with KIOCL?
Certainly! My journey began right after I graduated as a mechanical engineer in 1985. I joined KIOCL Limited in 1986 as a Graduate Engineer Trainee. Since then, I have been with KIOCL Limited, and I am now retiring as the Chairman and Managing Director (CMD).
It has been a remarkable journey for me to be a part of such an esteemed organization. It’s been an incredible experience working in PSU sector. My career has spanned over three decades, during which I have been deeply involved in mining, beneficiation, and pelletization.
From the beginning, our company has flourished in the mining sector. We were one of the biggest mining industries during those days, handling 20 million tonnes of low-grade magnetite iron ore annually. We upgraded this ore to 67% Fe through a beneficiation process using some of the best technologies available, which we continue to use even today.
Can you elaborate on the technologies and processes used at KIOCL?
Our company has always been at the forefront of technology adoption. We have a unique setup where we transport iron ore concentrate in slurry form through a pipeline from Kudremukh to Mangalore. In Mangalore, the concentrate is filtered to produce a filtered cake, which is then exported. Additionally, we have a pellet plant in Mangalore with a capacity of 3.5 million tonnes. This technological integration, from mining to loading the final product onto ships, has been a hallmark of KIOCL.
Our company has had a remarkable experience as a unique entity that has embraced technology from day one. We have been tech-savvy throughout our operations, from mining to loading onto ships, and we continue to leverage advanced technology today.
How has KIOCL Limited evolved over the years, especially after the closure of the Kudremukh mine?
After the closure of the Kudremukh mine, KIOCL Limited faced significant challenges. However, we have successfully navigated through these tough times. Recently, we acquired the Devdar iron ore mine, which is a positive development. This acquisition signifies a new chapter for KIOCL Limited, ensuring continued growth and success in the mining industry.
Looking back at your career, what are some of the most significant achievements you are proud of?
There are many achievements that I am proud of, but a few stand out. Leading the successful beneficiation and pelletization of low-grade iron ore to high-quality standards, pioneering the use of slurry pipelines for transportation, and steering the company through the challenging phase following the mine closure are notable milestones. Additionally, the recent acquisition of the Devdar iron ore mine marks a significant achievement, positioning KIOCL Limited for future success.
KIOCL’s technological edge in mining industry
Our unwavering commitment to adopting and integrating technology into our operations sets us apart. From the day we began operations, technology has been at the core of our processes. This approach has allowed us to maintain high standards of efficiency and productivity, ensuring that we remain a leader in the industry.
Can you share your significant achievements and the impact they have had on your organization and the industry as a whole?
Over the years, our company has faced numerous challenges, especially after the closure of the mine. This created a tough situation due to three major uncertainties: the uncontrollable supply of raw materials, fluctuating raw material prices, and the logistical challenges of being located far from both the raw material sources and our customers. These factors greatly impact costs and create a high level of uncertainty in our industry, which primarily involves limited value addition through pellet manufacturing.
Despite these challenges, our company has managed to persevere and remain operational. Many companies might not have survived such conditions, but KIOCL has always believed in continuing the journey. Even during the COVID-19 pandemic, from 2021 onwards, we performed exceptionally well. In 2021-2022, despite the imposition of export duties on pellets, which significantly affected us, we managed to sustain operations. With the support of the Ministry and the Government of India, the export duty was removed in November 2022, allowing us to operate the pellet plant without setbacks.
In the 2022-2023 fiscal year, we faced losses due to the export duty and the global market downturn, which caused a decrease in demand and an oversupply in the pellet market. India has a pellet production capacity of 136 million tonnes, but we produced only 98 million tonnes, with internal consumption also being lower than expected. Despite these challenges, we reduced our losses significantly in 2022-2023 and 2023-2024. Our balance sheet shows considerable improvement, reflecting our resilience and strategic management.
Resilience and commitment to long-term success
The journey has been incredibly tough, but we have managed to sustain and continue our operations without looking back. The new initiatives in mineral exploration and the continued support from the government give us hope for a brighter future. We are committed to navigating through the uncertainties and achieving long-term success. The resilience and adaptability of our company are our greatest strengths, and I am confident that KIOCL Limited will continue to thrive in the years to come.
Can you tell us about any new initiatives KIOCL Limited has undertaken?
We are now exploring new horizons in the mineral exploration vertical. Our NABL-accredited laboratory in Mangalore is fully equipped for analyzing both basic and critical minerals. We have secured contracts from various state governments, including Tamil Nadu and Karnataka, and are also funded by NMET and even GSI has given us several projects. This vertical has tremendous growth potential and is helping us diversify our operations and income sources.
Diversifying into mineral exploration has provided us with a new revenue stream, contributing to our overall financial stability. This move is evident in our balance sheet, where other income from exploration activities has started to show significant impact. By setting up the NABL-accredited laboratory and securing various projects, we have positioned ourselves for growth and are working towards returning to a strong financial position.
Insights into the strategies and leadership approaches you have implemented?
As a mining company, we focus on our core value, which is mining. Even after the closure of a mine, we continue to concentrate on this core value. Our strategy involves persistent engagement with both the state and central governments to secure mining allocations. Through sustained efforts, we successfully obtained the Devadari iron ore mine through the reservation route under the MMDR Act. This was a significant achievement as we might be the first company to secure such a reservation under the state category for a 388-hectare mining area located in forest land.
Could you elaborate on the steps you took to achieve this?
We completed all necessary statutory clearances, including forest clearance, State Pollution Control Board clearance, and other establishment concerns. Finally, we registered the lease in January 2023, and we are now ready to start mining operations at Devadari. We have submitted our proposal to the Government of India to move the project forward and are expecting approval shortly. Developing the mine will ensure raw material security for our pellet plant in Mangalore, fulfilling about one-third of our requirements. The remaining two-thirds will continue to come from NMDC, allowing us to fully utilize our pellet plant capacity.
What other options are you exploring to sustain and expand your operations?
In addition to developing Devadari, we are exploring other options for expanding our resources. We also have a unit, which is not operational currently, a 350 cubic meter blast furnace, for which we secured government funding of 833 crores for forward and backward integration. Due to the COVID-19 situation and restrictions on importing technology from border-sharing countries like China, we have sourced the necessary technology indigenously. Our coke plant is operational, and we are working on backward integration by setting up a power plant using flue gas from the non-heat recovery type coke plant.
By putting the Devadari mine into operation and completing our integration projects, we will secure the necessary raw materials and energy to sustain and expand our operations. This strategy will help us navigate current challenges and position us better for future growth.
How KIOCL aligns with the UN’s Sustainable Development Goals (SDGs)?
Aligning with global requirements is essential, and decarbonization is a major focus for everyone. We need to transition towards fossil-free energy. Our company has taken significant steps in this direction. For instance, we installed a 10-megawatt solar power plant for our pellet plant. Additionally, we are planning to replace the furnace oil-based indurating machine with LNG to ensure cleaner fuel utilization.
Reducing carbon emissions
In our pellet plant, we aim to minimize the carbon footprint as much as possible during the manufacturing process. When setting up new plants, like the one in Devdari, we incorporate technologies that minimize decarbonization from the planning stage itself. This approach significantly contributes to reducing carbon emissions from the outset. Our steel ministry is also working towards incorporating as much renewable energy as possible into the industry, which supports our efforts.
Deployment of technology in new projects
For projects like the Devdari beneficiation plant, we plan to install power corridors, conveyor corridors, and water lines with advanced technologies that reduce carbon emissions. By addressing these aspects during the initial planning stage, we ensure substantial contributions to decarbonization. This proactive approach is essential for achieving our sustainability goals.
Exploring alternative energy sources
We are considering the use of gases produced from blast furnaces and coke ovens. Hydrogen is another promising alternative, though the current cost of production is high. However, we believe that with ongoing advancements, the cost will decrease, making hydrogen a viable option. Understanding the necessity of reducing global warming, we are committed to reducing and eventually eliminating carbon emissions.
PSU industry contributing to the broader goal of mitigating climate change
Every industry has a role to play in reducing global warming and mitigating climate change. By cutting down coal usage and exploring cleaner alternatives like gas and hydrogen, we can significantly reduce our carbon footprint. We are on the right path, and our initiatives will contribute to achieving the UN’s SDGs, particularly in areas related to affordable and clean energy, industry innovation, and climate action.
Your efforts in decarbonization are commendable. Any final thoughts on KIOCL’s sustainability journey?
It’s a collective learning process. Understanding the urgency of global warming and the necessity to reduce temperature rise is crucial. We are committed to not only reducing our carbon emissions but also ensuring that we do not contribute to future emissions. Our direction is clear, and we are confident that our initiatives will make a significant impact on achieving sustainable development goals.
