Essar Steel is in the final stage of completing its (Joda) Odisha slurry pipeline, which will help to resume operations at Pellet plant. The slurry pipeline (253 km long connecting Joda to Paradip) will help to transfer Iron ore from Odisha based miners to its Pellet plant in Paradip.
Essar is the second largest Pellet producer in Odisha and operates a 6 MnT pa Pellet plant in Paradip, which was commissioned in 2012. It produces Fe 63.5/64 grade blast furnace Pellets and procures Iron ore from Odisha based OMC and merchant miners namely Rungta, Serajuddin, Indrani Patnaik and KJS Ahluwalia.
The Pellet plant was non-operational for about six months as the slurry pipeline was under completion. The company might be able to run the Pellet plant at limited capacity initially because only few miners are offering Iron ore in Odisha. On 16 May, 2014, Supreme Court ordered suspension of mining operations from 10 Odisha based merchant Iron ore mines that produced 19.1 MnT in FY14.
Essar’s 12 MnT pa beneficiation plant at Dabuna (Odisha) is on way to get commissioned in this month.The company has an 8 MnT pa beneficiation plant at Bailadila (Chhattisgarh) which sources Iron ore from NMDC mines. The plants pump Iron ore slurry to Pellet plants at Paradip (Odisha; 253 km pipeline) and Visakhapatnam (Andhra Pradesh; 267 km pipeline) respectively.
In Q3 FY14 (Oct-Dec 2014), Essar is likely to scale up its Pellet making capacity in Paradip to 12 MnT pa and it will become India’s leading Pellet producer with 20 MnT pa total installed capacity (operates 8 MnT pa plant in Vizag and 6 MnT in Paradip), however, without a single captive Iron ore mines.
To secure Iron ore supply, Essar may bid for C category Iron ore mines auction in Karnataka. Presently, it procures Iron ore from NMDC Bailadila mines in Chhattisgarh, OMC and merchant mines in Odisha.
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