Essar Steel to commission pellet unit in Odisha

Hazira: Buoyed by its Hazira complex becoming the country`s largest single location flat steel maker with 10 mtpa capacity, Essar Steel is set to commission a pellet unit in a week in Odisha to pave the way for setting up of its proposed 6 mtpa integrated steel plant.

"Our proposed 12 mtpa pellet plant is likely to start production in about a week in Odisha`s Paradip where we want to replicate ths success story of Hazira complex," Essar Steel India`s MD and CEO Dilip Oommen told visiting journalists from Odisha here. After doubling of the capacity of Hazira complex to 10 mtpa making it the largest single location flat steel producer in the country, Essar is keen to give momentum to its Odisha project including commissioning of the pellet plant at Paradip with an initial capacity of 6 mtpa, he said.

Charging operation for the pellet plant had already been completed and the unit`s capacity would be raised up to 12 mtpa within a year, Oommen said. The next on the agenda is the setting up of a six mtpa integrated steel plant (ISP) at the same site in Paradip for which an MoU already existed, the Essar Steel MD said expressing hope that government would ensure a level playing field for both domestic and international players.

"Establishing an ISP will be the most logical move after putting the pellet plant in full steam and we hope the government would give equal treatment to both domestic and international investors while offering opportunities like mining lease and other facilities," he said. Stating that about 1500 acres of land would be required for the purpose, Oommen said over 250 acres had already been acquired and the acquisition process was on. The company has already spent about Rs 250 crore in Odisha.

Along with the pellet unit, Essar is also working on a corresponding 12 mtpa beneficiation plant at Dabuna and slurry pipe line in close proximity of major mining sites, he said. During construction of the plant at Paradip and Dabuna, about 5,000 people were engaged of which 80 per cent people were from Odisha. The project planned to use low grade iron ore fines that are unused and not easily consumable, benefiting the nation by using resources within the country. Environmental impact would be kept to a minimum with the use of slurry pipeline for transporting raw materials, Oommen said.

Stating that Essar is using only non-forest land for the pipeline upto Paradip, he said while 253 km of the pipeline had already been covered, only 17-18 km strech was left to be constructed. By July, this year the pipeline would be ready and till then raw material for the pellet unit would come from the beneficiation plant at Kirandul adjacent to the NMDC mines, contrining high grade ore. Essar would emerge as the largest pellet producer in the country with the commissioning of Odisha project, he said.

With a portion of the pipeline from Chhattisgarh to Vizag damaged by Maoists, raw materials were transported only through rail, making it expensive and time-consuming, said Rajiv Bhatnagar, Chief of Essar`s Hazira complex. Therefore, a grinding facility was proposed to be set up at Paradip as a risk mitigation measure, he said. After setting up the proposed 6 mtpa ISP at Paradip, it is envisaged that about 3500 direct and 5200 indirect employment would be generated in addition to employment in various ancillary industries.

Establishing the ISP at Paradip would be a boon as Essar has three iron making technologies – HBI/DRI, Corex and Blast Furnace, giving flexibility in raw material inputs, be it iron ore or energry, Bhatnagar said. Stating that over Rs 37,500 crore was invested to create a ten mtpa fully integrated steel plant at Hazira, both Oommen and Bhatnagar said the project including expansion was completed at low capital costs to make it fourth largest single location flat steel proeucer globally.

Hazira experience with complete portfolio of flat steel proeucts and world class sustainability standards would immensely benefit the proposed integrated steel plant at Paradip, they said. Moreover, Essar Steel would contribute to the tune of about Rs 640 crore annually to Odisha government`s exchequer in terms of taxes when the pellet plant became fully operational, said another senior Essar official. Besides, it had already contributed to the tune of Rs 100 crore so far in terms of entry tax, works contract tax, royalty for sand and water charges, service tax during the construction period, he said adding that this would continue as the project surges ahead.