Essar Steel starts Orissa pelletisation plant

Essar Steel has commissioned a 6 million tonne per annum (mpta) iron ore pelletisation plant at Paradip in Orissa.

This is the first phase of its proposed 12 mpta facility, which would be India’s largest and entail a total investment of Rs4,200 crore.

Dilip Oommen, CEO and MD, Essar Steel, said the integrated Orissa facility includes a 12 mpta iron ore beneficiation plant at Dabuna and a 253-km slurry pipeline connecting Dabuna and Paradip. The Paradip plant along with 8 mpta capacity at Vizag will fully secure iron ore requirements of Essar Steel in India, he said.
On choosing Orissa, Oommen said the abundant supply of low-grade and low-priced iron ore made Orissa the best place for the venture.  

In many places in Orissa there are huge dumps of low-grade iron ore that makes Essar’s cost of production of pellets as low as Rs1,000 per tonne, he said.  “Our beneficiation plant is making a valuable stuff out of waste,” he said.

The plant would also reduce the operating cost per tonne and improve cost competitiveness of the company, said Pramod Gupta, head of the Paradip pellet plant.

Essar Steel is setting up an iron ore beneficiation plant at Dabuna to upgrade the quality of low- grade iron ore fines from 54% to over 63% Fe content. These fines will be supplied through the slurry pipeline to Paradip.

Amit Agarwal, chief financial officer, said the bulk of Essar Steel iron ore needs have been secured through offtake
agreements with key players including NMDC and private miners in Orissa and through captive mines in Jharkhand and Chhattisgarh.

In addition, an iron ore beneficiation plant would be set up by the company to facilitate usage of low-grade iron ore fines abundantly available in the country, he said.

Oommen said in the short term there could be oversupply of steel due to a lot of capacity coming on-stream, but in the long term the demand will outstrip supply.

“Our per capita consumption of steel is very low and with younger population and increasing urbanisation, demand is certain to go up. Even if India develops 150 million tonne of capacity by 2020 it will still short of demand,” he said, adding Essar Steel is moving towards manufacturing of high-value products and newer markets.

“We are analysing the pattern of imported steel products in India and on the basis of it we are developing our capabilities for manufacturing high-end value-added products,” he said. With the completion of 10 mtpa steel capacity, the company would target Rs40,000 crore in revenues, Agarwal said.