In a major risk mitigation step, Essar Steel has started surveying the areas through which it would reroute the Kirandul-Vizag pipeline, which transports iron ore in the form of slurry from Chhattisgarh to its pelletisation plant in Visakhapatnam.
At 267 km, the Kirandul-Vizag pipeline is the longest slurry pipeline in India, which runs through forest areas infested by Maoists.
Amit Agarwal, chief financial officer, Essar Steel, confirmed the rerouting has been approved and the company was currently scouting for a new path for the pipeline.
However, the rerouting will make the pipeline much longer as the company is trying to bypass as much of forest land as possible and be close to the state and national highways. Essar Steel did not disclose the amount it will spend on the new route as the project is currently being developed. However, the cost would be more than Rs 1,000 crore, the amount it spent on laying down the pipeline earlier. This is a risk mitigation step that the company has been planning for a while now. The timeline of the survey and the completion of the rerouting is currently in the works.
The Kirandul-Vizag pipeline was attacked by Maoists in October 2011, which left the operations at its pellet plant crippled. The company had chosen the particular 267-km route earlier as it was the shortest distance between the benefication plant in Kirandul, Chhattisgarh, to its pellet plant in Visakhapatnam. Therefore, the pipeline ran through forest areas and regions which were known to be Maoist-infested.
When it built another pipeline connecting Dabuna and Paradip in Odisha, Essar Steel laid it down near the highways to mitigate the red terror risks. Based on the same philosophy, the steelmaker is now rerouting the first pipeline along the highways to make it safer from unnatural disruptions.
The Visakhapatnam pellet plant has a capacity of 8 mt. The company gets iron ore from NMDC Ltd and feeds it to the benefication plant in Kirandul. Afterwards, the ore is sent to the pellet plant in Visakhapatnam via the pipeline. The ore will be converted into pellets at the plant and then shipped to Essar’s Hazira steel plant.
Essar recently expanded the capacity of its steel plant in Hazira, Gujarat, to 10 million tonnes (mt). It needs 20 mt of ore every year to feed the steel plant. Therefore, the functioning of the Kirandul-Vizag pipeline is crucial for the functioning of the steel plant in Hazira.
Essar Steel said the company was in talks with various companies for setting up the new pipeline but no decision has been taken yet. Agarwal said the contract hadn’t been awarded to anyone yet, as “we are still surveying the possible areas from the pipeline could be laid”.