Leading Indian pellet maker Essar Steel is in talks with a few companies in Saudi Arabia to export the intermediate product.
“Some companies in Saudi Arabia have expressed interest to buy pellets from us. We are exploring the country as an export destination”, said a senior company executive.
Iran used to be one of the favoured export markets for Indian pellet producers. But of late, Iran has been highly selective in importing pellets and is only opting for higher grade material made from rich iron ore fines.
Iran’s Gol Gohar mines has an arrangement with India’s PSU KIOCL Ltd (formerly Kudremukh Iron Ore Company Ltd) to ship higher grade fines and import back the pellets manufactured at KIOCL’s shore based facility at Mangalore. Iran despite its adequate iron ore reserves has capacity constraints in pellet making.
On its part, Essar Steel is focusing more on domestic value addition instead of scaling up pellet exports. It is aiming to ramp up pellet production capacity at its Paradeep plant in the eastern state of Odisha from six million tonnes per annum (mtpa) to 12 mtpa. The capacity augmentation is expected to be commissioned by the end of this financial year. The expansion will make Essar Steel’s Paradeep unit the single largest pellet making complex in the country.
Essar Steel runs the shore based pellet unit at Paradeep using low grade iron ore fines (58-63 per cent Fe) beneficiated at its 12 mtpa plant at Dabuna near Keonjhar. The beneficiated iron ore fines is transported through 253-km slurry pipeline.
In the last fiscal, the company exported 1.2 million tonnes of pellets. In the future, Essar Steel will cut its pellet exports and use them for further value addition.
Essar Steel feels new capacity additions in steel manufacturing would give a fillip to pellet use in steel plants. The use of pellets in blast furnaces reduces coke rate and cuts downs on emissions of carbon dioxide by up to 85 per cent. Pellet competes with lumpy ore in the domestic market. Most steel maker preferred lumps to pellets due to cost factor.
Essar Steel’s Paradip facility makes fluxed pellets that find use in multiple iron making technologies- Corex, DRI and blast furnaces. The cost of pellet production at the site is Rs 3300 per tonne.
The company has the largest pellet manufacturing capacity in the country at 20 million tonnes per annum (mtpa) followed by JSW Steel at 13 mtpa and Jindal Steel & Power Ltd (JSPL) with 9.2 mtpa.
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