KIOCL is about to enter into an agreement with Iran’s Gol Gohar Mines shortly, whereby it would make pellets out of the imported fines and export them back to Iran.
KIOCL (Kudremukh Iron Ore Company Ltd) is all set to import about 1 MnT iron fines every year from Iran’s Gol Gohar mines as an effort to regain its pellet export market share. The company will import iron ore and make pellets, which will then be exported to Iran. The first shipment of 50,000 MT iron fines is expected to arrive to India next month. Gol Gohar mines located in southern Iran has estimated iron ore deposits of 1,135 MnT. KIOCL has recently agreed to export 1-2 MnT high quality iron pellet to Iran.
KIOCL is also in talks to buy high grade iron ore from Brazil. Last fiscal, KIOCL received permission from Director General of Foreign Trade (DGFT) under ministry of commerce & industry to export pellets under third party mechanism.
KIOCL currently operates a 3.5 MnT pa pellet plant at Mangalore. It is also looking forward to set up a 1 MnT pa pellet plant at Andhra Pradesh and is also keen to acquire majority stake in two IDCOL units, namely, IDCOL Kalinga Iron Works (IKIWL) and IDCOL Ferro Chrome Alloys (IFCAL).
Iran still away from meeting its total pellet requirement
Iran, which is the world’s leading DRI producer, produced around 21 MnT pellets and imported about 7-8 MnT pellets to meet shortfall of its total requirement of 28-29 MnT pellets. Hence, KIOCL is looking up for this opportunity and expects to sell upto 2 MnT pellets to Iran.
KIOCL’s pellet production fell by 54% in FY15
Last fiscal was not so encouraging for the Indian pellet industry as it witnessed increase in iron ore & pellet imports. KIOCL’s pellet production fell by 54% Y-o-Y from 1.710 MnT in FY14 to 0.785 MnT in FY15. Pellet sales also declined by 58% Y-o-Y from 1.615 MnT to 0.68 MnT in FY15.
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