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| Iron firms bank on pellets for growth |
| Dilip Kumar Jha / Mumbai Oct 28, 2009, 00:28 IST |
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Considering pelletisation the next growth driver, integrated iron and steel producers have decided to invest immensely in pellet plants before transporting iron ore to steel mills.
Pelletisation is a process where ore concentrate is formed into soft pellets, in much the same manner that one rolls a snowball. Iron ore pellets are easy for transportation, which reduces wastage and cost of steelmaking. A pellet plant contains a series of balling drums where the ore concentrate is formed into soft pellets, each the size of a marble (between a fourth and a half of an inch).
A more economical way of steelmaking has even more attraction now, since margins of steel mills remain under pressure due to a gradual rise in raw material prices and stagnant sale prices. Also, in the face of shrinking world reserves of high-grade ore, the steelmaking raw material must now be concentrated before further processing.
Pellets form one of the best options, thanks to their excellent physical and metallurgical properties; this takes place as the process involves removal of various impurities and low-grades in the ore.. Moreover, due to their high strength and suitability for storage, pellets can be easily transported over long distances, with repeated transshipments if necessary.
And, domestic steel mills are not designed to use iron ore fines, the technical term for an iron concentration of less than 63 per cent. Pelletisation addresses this aspect.
Since uncertainty continues in the global ore market, India needs to focus on pelletisation, which not only allows use of fines but also prolongs its ore reserve, said Vimal Kumar Somani, Director, Topworth Group of Companies.
The Mumbai-based Topworth Group is currently setting up 1.2 million tonnes (MT) of a pelletisation unit in two phases of 0.6 MT each, at an investment of Rs 250 crore. The first phase of this project is to commence commercial production by the end of 2010.
“Exploration on our own iron ore mines, for which we obtained leases from the Chhattisgarh government, is likely to begin in three years. By then, we would meet iron ore requirement from nearby mines,” Somani added. The Topworth Group is planning to invest Rs 1,200 crore on steel, power and sponge iron projects on its existing location in Durg, Chhattisgarh.
Delhi-based Monnet Ispat & Energy, one of the largest integrated producers, is planning to expand its steelmaking capacity to 2 MT from the existing 0.4 MT at Raigarh in Chhattisgarh, entailing an investment between Rs 1,800 and Rs 2,000 crore. The plan would entail setting up a sintering plant, blast furnace, pellet making and a captive power plant. Its pellet plant with a capacity of a million tonnes would need an investment between Rs 150-200 crore.
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