Essar Steel to start ops at Odisha captive mine in FY18

Mine to meet 30% requirement of Hazira steel mill

Essar Steel said it hopes to commence mining from its captive iron ore block in Odisha in the first quarter of 2017-18.

The steel maker recently bagged the Ghoraburhani-Sagasahi block in Odisha through auctions, quoting a premium of 44.35 per cent above the reserve price and outbidding strong contenders like Tata Steel and Jindal Steel & Power Ltd.

“The Essar Steel’s iron ore mine has reserves of 100 million tonnes, according to the current estimates. We plan to mine around six million tonnes per annum. We are in the process of seeking all approvals. This will take care of approximately 30 per cent of the requirement of our integrated steel plant at Hazira”, a company spokesperson told Business Standard in an e-mail response.

The Odisha government has issued the letter of intent to Essar Steel after it emerged as the preferred bidder in the first iron ore block offered for e-auctions in Odisha. The block is at G2 exploration stage and located in Koira sector in Sundargarh district.

The mineral concession area is spread over 139.16 hectares (ha), including 20.88 ha forest land, 110.69 ha government land and the balance 7.58 ha private land.

Survey of the mineral block had been done by the Geological Survey of India (GSI).

Currently, Essar Steel runs a 12 million tonnes per annum (mtpa) iron ore beneficiation plant at Dabuna in Keonjhar district and six mtpa pelletisation complex at Paradeep. The iron ore mine in Odisha is expected to meet 50 per cent of the firm’s pellet making facility at Paradeep.

“The pellets produced at our Odisha facility are meant primarily for use in our own 10 million tonnes per annum integrated steel plant at Hazira. Any surpluses available are being considered for sale/exports”, said the spokesperson.

Both the pellet plants at Paradip and Visakhapatnam are now operational and ensure consistent supply of pellets to the Essar steel mill at Hazira. Essar Steel’s flat steel production in the April-June period of this financial year was 1.22 million tonnes (mt), marking a growth of 48 per cent over 0.824 mt produced in the same period of previous period. Even pellet production grew by 58 per cent to 2.02 mt, as against 1.28 mt in the comparable period of last year.

By the end of 2016-17, Essar Steel expects to record a marked increase in its capacity utilisation, and produce 80 per cent of its rated capacity in the country.