Essar Group, with interest ranging from steel to power, has hired former executive director of Vedanta Group and mining veteran PK Mukherjee, who retired from the Anil Agarwal-led mining conglomerate in 2014. Mukherjee, who pulled iron-ore miner Sesa Goathrough during its best and worst phases in the past 30 years, is advising the Ruia-controlled Essar Steel on its mining and mineral activities, and is working out of the group’s Goa office.
Mukherjee joined Sesa Goa in 1987 and took over as managing director in 2006. He continued to hold the post even after the company was bought by Vedanta in 2007. Mukherjee, seen as one of Agarwal’s confidants, demitted office during Vedanta’s management shuffle in 2014, citing health reasons.
“Essar Steel uses three iron making technologies — blast furnace, corex and direct-reduced iron which offer flexibility in using raw materials, primarily iron ore. Mukherjee’s expertise will be useful for the company in choosing the right input for iron making for sustainable cost reduction” said Firdose Vandrevala, Executive Vice Chairman at Essar Steel India.
Fifty-nine year old Mukherjee is also helping the company with procurement of iron ore fines, according to a person familiar with the matter, as the company scales up its steel-making capacity utilisation at its 10-million tonne plant in Gujarat to about 80 per cent this year from just over half last financial year.
“Mukherjee took a six-month break after leaving Vedanta last year. Essar’s offer came along after that,” said another person familiar with the move but did not want to be named. “He is also there to build long-term relationships with mine owners to source iron ore fines.”
Essar Steel, one of the few large steelmakers which does not own captive iron ore mines in India, have struggled to get enough of the raw material at affordable prices amid illegal mining scams and shutdowns in the past few years. The unlisted steelmaker is finally close to completely commissioning its mega steel project and is also gearing up for the upcoming iron ore mine auctions.
Mukherjee’s extensive experience and a network of relations are expected to be immensely beneficial to Essar Steel, which turned profitable in financial year 2015 after many tumultuous years.
“Given mining leases will be granted only through the auction route, there will be a chase for talent in the iron ore business,” said Anjani Agrawal, India Mining & Metals Leader at consultant EY. “Steel companies will seek to attract talent to become integrated steel players.”