NMDC finalises Rs 3,000-cr pipeline project

State-run iron ore miner NMDC Ltd has finalised a Rs 3,000-crore slurry pipeline project for evacuating ore from its Bailadila mines in Chhattisgarh to Visakhapatnam in Andhra Pradesh.

“I have just finalised the complete structure of laying the pipeline for evacuation of material from our Bailadila mines to Jagdalpur in the first stage and to Vizag in the second stage,” chairman and managing director Rana Som told Business Standard today. “We held a meeting on the technical and financial aspects, where we have taken a decision to kick-off the project today.” He said the company decided to set up the pipeline, connecting Bailadila with Vizag steel plant, because evacuation of iron ore from the mines was posing a problem on account of damage to Essar’s slurry pipeline and constraints in rail movement due to the Naxal movement.

In the first phase, the company would lay a 150-km pipeline from Bailadila to Jagdalpur in 18 months at an investment of Rs 1,000 crore. The second phase would see laying of pipeline from Jagdalpur to Visakhapatnam at an investment of Rs 2,000 crore.

“We won’t wait for completion of Phase-I. We might as well execute Phase-II simultaneously,” Som said.

The execution of the project, according to Som, will enable NMDC to dispatch an additional 6-7 million tonnes (mt) of ore. “To that extent, the production will also go up,” he said, emphasising that production and evacuation of ore were interlinked.

Apart from the pipeline, NMDC has entered into a memorandum of understanding with Indian Railways for laying of an additional railway line between Bailadila and Jagdalpur. NMDC has agreed to bear the entire cost of the line, estimated to be Rs 850 crore.

Som said railway authorities had also agreed to improve ore evacuation on the existing single line between Jagdalpur and Vizag by laying loop lines wherever necessary and ensuring frequent movement of goods trains.

The Bailadila mines account for nearly 70 per cent of NMDC’s iron ore production, which stood at 23.8 mt in 2009-10. Besides, NMDC is setting up a Rs 15,525-crore, 3-mtpa steel plant, a Rs 1000-crore pelletisation plant and a Rs 600-crore beneficiation plant at Nagarnur near Jagdalpur.