Essar Steel Limited, which plans to build a 9 million tonne per annum (MTPA) integrated steel plant in the state, intends to start production from its six million tonne pellet plant at Paradip by the end of March 2012.
“The Paradip plant got power connection last week. We will take another 10 days to make the plant ready (for pellet production),” said Dillip Oommen, chief executive officer and managing director of Essar Steel.
The pellet plant will use low grade iron ore fines that will be pumped through pipelines as concentrates from Dabuna in north Orissa to Paradip, a distance of 253 Km. The company has finished laying pipelines in about 236 Km, but had to halt the work for not getting forest land permit approval for 5 Km of the proposed pipeline.
“We have withdrawn forest land permit application for that area and are looking out for non-forest area to lay the pipes. The pipelines will be completed by June-July this year,” Oommen said.
Till then, the Paradip plant will consume iron ore filter cake from its Kirandul facility located in Chhatishgarh, which also provides raw material through pipelines to its Vishakhapatnam pellet plant that produces 8 mt every year.
Essar needs around 20 mt iron ore every year for its 10 mt flat steel factory in Hazira, Gujarat. Though Hazira plant also uses other forms of iron ore such as lumps, slimes and sinter, Essar said it will be able to produce 20 mt pellets by the end of 2012-13 by increasing the Paradip plant capacity to 12 mt.
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. It has obtained coal linkages which will help Essar to produce 60 Mw power at Paradip by this year end, out of the 120 Mw captive power plant proposed at the site.
The company is in the process of setting up 6 million tonne per annum beneficiation plant at Dabuna near Joda, which can enhance iron ore content in the fine from 58 per cent to 63 per cent. But the company is of the view that low grade ores with 58 per cent iron content should be taxed lower than export quality fines which contain higher than 62 per cent iron in it.
Currently, iron ore fines with 62 per cent iron content is sold at around Rs 2,300 per tonne in Orissa, the largest producer of the key steel making ingredient.