Indian Economy News

Essar Steel commissions Rs 6,000-cr pellet complex in Odisha

Bhubaneshwar: Essar Steel on Thursday announced the commissioning of an integrated 6 million tonne iron ore pellet plant near Paradip in Odisha. The factory is linked by a 253-km slurry pipeline with a facility which is located at Odisha's iron ore belt and can beneficiate low-grade ore.

The company has only 405 acres in its possession of the total 2,500 acres it wants for the project. "We decided we will show our commitment by putting a foot on the ground and investing Rs 6,000 crore till we get all the other things in place," Executive Vice Chairman Firdose Vandrevala told a press conference in Bhubaneshwar.

Given the pace at which projects are progressing and considering the estimated demand and targets under the National Mineral Policy, Vandrevala said he feared a possible Steel shortage by 2018. Given the circumstances of land acquisition, a new steel plant which will take four-five years in China will take eight-ten years in India, he said.

With the commissioning of the pellet plant at Jagatsinghpur, Essar's capacity to make the material used in sponge-iron steelmaking has increased to 14 million tonnes a year. The lifeline to its other 8 mt pellet plant in Visakhapatnam - a 273-km slurry pipeline that brings iron ore down from Chhattisgarh - is also up and running again after it was destroyed twice by left-wing extremists. The company's own annual requirement at its plant at Hazira in Gujarat is 12 mt, but raw material constraints have forced it to operate at less than full capacity.

According to Essar, the current situation where many of Odisha's iron ore mines are shut, is only a temporary hitch. Vandravala compared it with pangs of hunger during a weight-loss regime, but in the long term saw an opportunity for the company. "We are located where there are mines close to us. Some are closed and we expect them to resume shortly. And then, Odisha also has a policy where 50% of the ore has to be fed to local units; we can take advantage of that policy also," he said.

The company's beneficiation plant at Dabuna in Keonjhar district will be using low-grade fines. The pipeline can move 10 lakh tonnes of material every month. The Odisha complex includes a 120 megawatt power plant and a captive berth at Paradip Port. The company hopes to commission another 6 mt at Paradip before December 2015.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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