Essar Steel commissions Phase 1 of Odisha pellet plant

Mumbai, April 9 (IANS) Essar Steel Monday announced the commissioning of the first phase of its 12 million tonne per annum (MTPA) pellet-making facility in Odisha, which will be fully operational by 2013.

In the first phase, the company has commissioned a six MTPA pellet plant in Paradip. The plant will use low grade iron ore fines (waste) that will be pumped through pipelines as concentrates from Dabuna in north Odisha.

The company is investing Rs.4,200 crore to set up an integrated facility which includes a 12 MTPA iron ore benefication plant at Dabuna and a 253 km-long slurry pipeline connecting Dabuna and Paradip.

"This will secure sustainable raw material source at right cost and we have ensured that the safety and environmental aspects are given due importance in the design, construction and operations of the plant," MD & CEO of Essar Steel Dilip Oommen told reporters here.

The commissioning of the Paradip pellet plant is the second significant announcement by the company after it announced the expansion of steel capacity to 10 MTPA at Hazira in Gujarat.

Essar needs around 20 million tonnes of iron ore every year for its 10 MTPA flat steel factory in Hazira. Though the Hazira plant also uses other forms of iron ore such as lumps, slimes and sinter, the company's Chief Financial Officer Amit Agarwal said that it will be able to produce 20 million tonne pellets by the end of 2012-13 by increasing the Paradip plant capacity to 12 MTPA.

When asked if the company owns any captive mines in the country, Oommen said: "At present, the company does not have any captive mines in the country but has supply agreements with state-run National Mineral Development Corporation (NMDC) and with other private iron ore miners."

The company has also obtained coal linkages which will help produce 60 MW power at Paradip by the year end, out of the 120 Mw captive power plant proposed at the site.

With the first phase of the plant operational in Paradip, it will be able to enhance iron ore content in the fine from 58 percent to 63 percent.

"Once the 12 MTPA Paradip facility is completed, along with the pellet capacity of eight MTPA at Vizag in Andhra Pradesh, Essar Steel will have a total pellet-making capacity of 20 MTPA, making it the largest pellet producer in the country," Oommen said.

The company is also in process of commissioning a berth at the Paradip port by the end of this quarter.