KIOCL charts Rs 110 cr modernisation scheme

The plant had been dogged by raw material shortage after its captive mines were shut in 2006.

Of the proposed investment, Rs 40 crore will be used for the upgrade of the machinery and Rs 70 crore to mechanise handling of raw material. The mini-ratna company, which is profitable, also plans to set up a railway siding from its pellet plant to the nearby railway station at Tokur for bringing raw materials.

The company has acquired around 53 acres from the Karnataka Industrial Areas Development Board for laying railway siding.

It intends to set up a tubular conveyor to transfer the raw material from the railway station to the pellet plant. This is expected to help the firm save a lot result in a lot of savings for the company.

Said K Ranganath, Chairman and Managing Director, KIOCL, "We are in the process of upgrading key machinery at our pellet plant to process even inferior quality ore and extract higher iron contents. The modernisation will enable us to operate the plant at its full capacity of 3.5 million tonnes per annum and increase exports as well," KIOCL chairman and managing director K Ranganath told Business Standard.

Following the closure of its captive iron ore mines at Kudremukh in Chikmagalur district, about 110 km from Mangalore, in compliance with the Supreme Court order, the company is sourcing 1 million tonne iron ore from Bailadila in Chhattisgarh and 1.5 million tonne from Donimalai in Bellary district of Karnataka.

The new machinery will enable the plant to blend Bailadila ore, which has 66 per cent ferric content, with Donimalai ore having 63 per cent ferric content to manufacture high-quality pellets for the Chinese market.

"Once we replace "vacuum filters" at the pellet plant with "pressure filters", we don't have to blend the two different ores. The new filters will also help us process even low grade ore from Donimalai and get the required quality," Ranganath said.

The company is importing these pressure filters from Sweden. To begin with, KIOCL plans to install 3 pressure filters this year and another 6 filters in the next year in three phases for Rs 40 crore. As against 18 vacuum filters, 9 pressure filters will be sufficient to process the raw material.

During the present year, pellet production will be increased to 2.5 million tonnes from 1.9 million tonnes and to full capacity (3.5 million tonnes) as against 50 per cent of the installed capacity.