Tata Steel To Acquire 100% Equity Shares of Brahmani River Pellets

Tata Steel announced today (i.e. on 23 Dec’16) that it has executed definitive agreements to acquire 100% equity shares of Brahmani River Pellets (BRPL) from Aryan Mining & Trading Corporation (AMTC) and companies in the Moorgate Industries Group (MIG).

The acquisition will provide an opportunity to meet Tata Steel’s metallic requirement and improving the feed mix for its Kalinganagar and Jamshedpur steel plants.

BRPL is engaged in the iron ore beneficiation and manufacturing & selling of iron ore pellets. BRPL owns 4 MnT pa pellet plant in Jajpur (Odisha), 4.7 MnT pa iron ore beneficiation plant in Barbil (Odisha) and 220 km slurry pipeline connecting pellet and benefication plants.

The transaction is based on an enterprise value of BRPL of INR 900 crores plus closing adjustments and is subject to completion of certain conditions precedents including regulatory approval.

BRPL’s revenue in last three consecutive years were as follows: FY14 – INR 572 crores, FY15 – INR 1,068 crores and FY16 – INR 452 crores.

Mr. Koushik Chatterjee, Group ED (Finance & Corporate) and member of the Tata Steel Board said “The location of BRPL assets makes this very strategic to Tata Steel especially to our Kalinganagar operations and has significant operating synergies to make our Kalinganagar plant even more competitive for future. The iron ore from our captive mine in Joda and Khondbond region will get transferred in future through the slurry pipeline and reduce freight costs significantly apart from the 4 MnT pa pellet plant & other infrastructure which will enhance the operating efficiency and reduce costs of blast furnace operations in Kalinganagar.”

To build a similar facility would have taken significant time and costs and therefore, this acquisition is very timely as we are looking to ramp up the capacity of Phase 1 at Kalinganagar, he added.

Tata Steel’s Kalinganagar plant is established in two phases of 3 MnT each. During the 1st phase, the blast furnace is having a capacity of 3.3 MnT pa of hot metal production.