The second phase will be completed by the end of current fiscal
Essar Steel has commissioned a six million-tonne pellet-making plant at Paradip in Odisha.
This marks the completion of the first phase of the 12 million-tonne plant, which will be commissioned fully by 2013. The company will totally invest Rs.4,200 crore in this project.
The integrated facility includes a 12-million tonne iron ore beneficiation plant at Dabuna and a 253-km slurry pipeline, connecting Dabuna to Paradip, which, the company said, would reduce operating costs per tonne and improve the overall competitiveness.
Essar Steel recently commissioned its 10-million tonne project at Hazira in Gujarat.
Addressing a press conference here, Essar Steel CEO and Managing Director Dilip Oommen said the entire focus is on completing the Odisha project, and increase production at Hazira. We will complete the second phase of the Odisha project by the end of the current fiscal.'' The Hazira plant produced 4.35 million tonnes last year. It could make 7.4 million tonnes this fiscal. The company was not contemplating a steel plant in Odisha in the near-term, he said.
The ore beneficiation plant at Dabuna will upgrade the low grade iron ore fines from 54 per cent iron content to over 63 per cent iron content. These will go via the slurry line to Paradip to make pellets to be shipped to Hazira.
Essar secured the bulk of its iron ore needs through agreements with NMDC, private mines in Odisha and captive mines in Jharkhand and Chhattisgarh.
“We have a long-term contract with NMDC for our Vizag operations and a ten-year contract with private mines to meet the requirements in Odisha,'' said Essar Steel Director (Finance) Amit Agarwal.
He said Essar had tied up funding and achieved financial closure for the Odisha project. Its debt is around Rs.20,000 crore. At full capacity from Hazira, the company was targeting a revenue of Rs.40,000 crore. The value of exports would be 30-35 per cent of the total revenue, he said.
Mr. Oommen said the company was considering exports to countries in the NAFTA region, Middle East and the Far East. “We will also look at Africa, which is neglected but has lot of potential.''