Essar Steel, which is operating a six million tonne per annum (mtpa) iron ore pellet making plant in Odisha, said its recently commissioned slurry pipeline is expected to bring down pellet transportation expenses by Rs 1,200 per tonne, which works out to a fifth of total production cost.
“We will save Rs 1,200 per tonne because of this slurry pipeline as we no longer depend on road or rail transportation to bring iron ore fines down to our pellet making site at Paradip,” said Firdose Vandrevala, executive vice-chairman of the steelmaker at a media briefing here.
The company recently completed 253 km-long slurry pipeline that connects its ore washery plant at Dabuna, in Keonjhar district with its pelletisation unit at Paradip, the second longest in the country. In 2011, it had to halt the pipe laying work because of forest clearance issues, and submitted an alternate plan using a different pipe route to complete the project.
The Paradip plant has been producing pellets since 2012, by transporting iron ore fines through railways. The pellets are shipped to its Hazira steel making facility in Gujarat.
Manufacturers use powdery iron ore to produce pellets which can be used as a substitute for sized iron ore in steel making process. Essar said, it is currently in talks with Odisha Mining Corporation (OMC) to sign a long-term raw material pact for supply of iron ore fines.
“We need 9 million tonne fines per year for our Paradip plant. But we have asked OMC to provide us at least 3 million tonne per year from its stocks through long-term supply agreements. The application is yet to be expedited,” said Rajendra Mittal, chief executive officer (CEO) of Essar Steel, Odisha. OMC, an undertaking of the Odisha government, has close to two million tonne high grade iron ore fines stacked at its different mining sites due to lack of dispatch facility. Essar intends to build a conveyor belt in Sundargarh districts to transport the iron ore to its Keonjhar washery unit, if OMC agrees to the proposal, Mittal added.
The company is currently meeting its need by procuring iron ore fines from private miners as well as OMC. Though the recent shutdown of major iron ore mines has added to the woes of the company, it hopes things would change soon.
“A gap in supply-demand scenario in Odisha due to the mines closure has resulted in increase of iron ore rates, whereas in global markets it has actually gone down. We hope, things would improve soon with the proactive steps being taken by the state government,” said Vandrevala.
Source: Business Standard
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