JSW Steel proposes Rs 2,100-cr iron ore, coal slurry pipeline in Karnataka

It will enable JSW to meet 50% of the current iron ore requirement at its Vijayanagar Works plant

JSW Steel on Thursday proposed constructing a Rs 2,100-crore slurry pipeline project to transport iron ore and coal at competitive prices in Karnataka, where it is currently operating a 12-million tonnes per annum (MTPA) integrated steel plant.

Transportation of iron ore through a slurry pipeline is environmentally friendly. The project will contribute to alternate sources of iron ore from outside Karnataka at competitive prices, JSW Steel said in a statement.

The proposed pipeline can be set up within 24 months at an estimated cost of Rs 2,100 crore. If approved, it will facilitate the transportation of iron ore at a very competitive price — 15 per cent the cost of transport by other means.

This project will enable the company to meet about 50 per cent of the current requirement of iron ore at JSW’s Vijayanagar Works plant from outside Karnataka. Sourcing will be done through imports, from Odisha, and the eastern sector at prices lower than those prevailing in Karnataka.

The company has been exploring the feasibility of setting up slurry pipelines for transporting coal from coastal Karnataka to Vijayanagar Works, which is one of the largest single-location steel producing facilities in the country.

"We have already outlined a capex (capital expenditure) programme of Rs 26,800 crore to expand overall steelmaking capacity to 23 MTPA by March 2020 and increase our downstream flat steel capacity to 7 MTPA by September 2019, along with a few other strategic projects. These key projects will be set-up at a very competitive capital cost and will improve our return ratios further," JSW Group Chairman Sajjan Jindal said addressing shareholders at the company’s 23rd Annual General Meeting.

The chairman said that the company was working to operationalise all five of the iron ore mines it won in Karnataka in October 2016, helping JSW meet approximately 20 per cent of the total iron ore requirement at Vijayanagar.

Jindal also said the company, which has an installed steel-making capacity of 18 MTPA, would continue to bid for more iron ore and coal mines.

The board of directors has approved the construction of a slurry pipeline from coastal Karnataka to the Vijayanagar works, the company said. This has been done since the availability of iron ore at a fair price within Karnataka and environment-friendly transportation of iron ore are important imperatives for its long-term sustainability.

Meanwhile, Jindal said, "We are also working towards operationalising our US coal mines in the current year. Moreover, with better prospects for infrastructure spending in the US and hence a demand for key end markets for plates and pipes, we expect a turnaround at our US Plate & Pipe Mill facility in the current year.”