Iran seen as potential pellet importer. Exemption for paying 5% export duty on iron ore has been requested by KIOCL.
KIOCL has released an expression of interest (EoI) inviting global reputed steel plants, mine owners and traders for conversion of iron ore fines to pellets on long term basis. The company is looking for parties who are interested in selling iron ore fines to KIOCL and purchase back the produced pellets in return. The total annual offtake of iron pellet will be 2-3 MnT.
Discussing this new strategy, one of the company official mentioned, “We are trying a new corporate strategy, to see how the market reacts towards this EoI. Depending upon the interest shown by agencies, we could proceed and conclude the technical criteria”.
KIOCL Shows Trade Interest in Iranian Market
KIOCL received a go-ahead signal from the government in order to source iron ore from Iran under rupee trade mechanism. The produced pellet has to be exported back to Iran to meet Iranian steel plants demand.
“Since one year, KIOCL has been looking for a market in Iran. Through this rupee trade mechanism the company intends to trade for 10-15 MnT pellets from Iranian steel plants,” Malay Chatterjee CMD of KIOCL, said.
In a recent meeting held between KIOCL, MMTC and Union Steel & Commerce minsters, KIOCL has been advised to sign a long term contract with Iran within next two years. For this, KIOCL has decided to request a 5% exemption on export duty on iron ore. Earlier, export of pellets to Iran has been dealt with by the State Trading Corporation ( STC).
KIOCL’s Pellet Production Scenario
KIOCL’s FY15 pellet production took a hit by 54%. The total pellet production in FY15 lies in the range of 0.78 MnT, while target was set as minimum 1.6 MnT to maximum 2.25 MnT. Reasons behind this shortfall is concluded as lack of raw material availability and falling iron ore prices both in domestic and international market in last fiscal. The annual production in FY14 was recorded as 1.71 MnT. Currently, the company targets 1.8 MnT pellet production and sales in FY16.
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