Monday, September 20,
Essar Steel, India’s second-largest private steelmaker by capacity has entered into deals with private Iron-ore miners from Orissa, including KJS Ahluwalia and Mesco group, for supplies over a 10-year period with a clause for 3% escalation in price every year.
The move is to ensure raw material security even if the company seeks to buy mines overseas and apply for allotment of captive mines from within the country.
“We’ll source ore from 8 to 10 different exporters as we ramp up capacity at Hazira (the steelmaking plant),” Essar CEO Malay Mukherjee said on Friday.
“We are investing in a beneficiation plant at Damona in Orissa as part of our Rs 18,000-crore capex plan, the ore will be processed at our upcoming 12-mt pellet plant at Paradeep and shipped to Hazira,” he added.
A beneficiation plant typically improves the quality of Iron ore. The ore that would be sourced from the private miners has a ferrous content of 55-61%, which would be taken up to 65%.
Mr Mukherjee also said that sourcing ore from Orissa and beneficiating it will be cheaper by about $50 per tonne, compared to the current practice of buying it from state-owned National NMDC.
Source: The Economic Times
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