Essar Steel Ltd. commissioned a six million tonnes per annum or mtpa pellet-making facility at Paradip in Odisha on Monday. This is the first phase of the 12 mtpa pellet plant to be commissioned by 2013, reports said.
The company is also setting up 12 mtpa iron ore beneficiation plant at Dabuna and a 253 km slurry pipeline connecting Dabuna and Paradip. The beneficiation plant will increase the iron content in the ore to 63 percent from 54 percent.
Essar Steel plans to invest Rs.4,200 crore to set up the integrated facility in Odisha.
The pellet plant in Paradip, along with the eight mtpa facility at Visakhapatnam in Andhra Pradesh will fully meet the iron ore requirements of the company's Hazira plant, it said.
Managing Director and CEO Dilip Oommen said the company would beneficiate the low-grade iron ore available at Dabuna and transport it through a slurry pipe to the pellet plant at Paradip. The pellets will then be transported from the company's dedicated berth at Paradip port to Hazira.
"The entire process will bring down our production cost to $750 a tonne against the industry average of $1,000 to $1,350 a tonne," he said.
Essar has emerged as the largest pellet producer in India with a capacity of 14 mtpa. The capacity will increase to 20 mtpa after completion of the second phase in Odisha. JSW Steel has 9.2 mtpa capacity, followed by JSPL, at 4.5 mtpa.
Essar Steel requires around 15 mtpa pellets to produce 10 mtpa of steel at Hazira. It intends to either export or offload the surplus pellets when the entire capacity is commissioned.
The company has signed a 10-year supply contract for iron ore in Odisha and has a long-term contract with NMDC for its requirement at Visakhapatnam. It has also applied for allotment of iron ore mines in Odisha.
The company has set a production target of 7.4 mtpa for this fiscal, compared to 4.35 mtpa achieved in FY12.
The company's turnover will touch Rs.40,000 crore once it produces 10 mtpa of steel, Oommen said. It has a debt of Rs.20,000 crore.
by RTT Staff Writer
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