JSPL to build direct reduction iron plant in Bolivia

Industrialist Naveen Jindal-led Jindal Steel and Power (JSPL) today said it will build a 2.52 million tonne per annum natural gas based Direct Reduction Iron (DRI) plant in Puerto Suarez, Bolivia.

"The contract for this new plant was signed on March 30, 2011," the company said in a statement, adding this would be first of the three units of its proposed sponge iron plant in the country.

The DRI plant, to be run on MIDREX technology, will feature the latest shaft furnace innovations and will have the flexibility to produce both quality hot DRI and hot briquetted iron for use in the new proposed greenfield steel plant, the statement further said.

DRI, also called sponge iron by the steel industry, is produced from direct reduction of iron ore (in the form of lumps, pellets or fines) by a reducing gas produced from natural gas or coal and is used for making steel.

The company, however, did not disclose how much it will invest for setting up this DRI plant in Bolivia.

Besides this, iron ore and iron ore pellets will be supplied from JSPL's El Mutun iron ore mine in Bolivia, where it is also installing iron ore pelltisation plant and steel making facility, the statement said.

According to the JSPL, the MIDREX-based DRI plant in Bolivia will be the largest single module in the world till date of any commercial DRI technology and this project marks company's third selection of the MIDREX direct reduction process technology for commercial DR production.

The other two plants are at its units at Angul, Orissa and Oman.

The Naveen Jindal-led company has entered into an agreement with the Bolivian government in 2007 to develop El Mutun mines, which is considered as one of the world's single biggest iron-ore deposits.

The El Mutun mines has reserves of more than 40 billion tonne and JSPL's agreement included construction of a 1.7 million tonne per annum steel plant, a 6 million tonne per annum sponge iron plant and 10 million tonne per annum iron ore pellet plant, along with a 40-year contract to mine about half of the reserves.

JSPL had earlier said the entire project would get an estimated investment of about $2.1 billion.

The company had also said that it will start iron ore exports from the El Mutun mines in this calender year and would raise it to 10 million tonne per annum gradually, while the steel plant will be commissioned by 2014.

Shares of JSPL closed today at Rs 619.45 on the Bombay Stock Exchange, down marginally  from the previous close.