27 AUG, 2012, RAKHI MAZUMDAR, ET BUREAU
KOLKATA: In a spot after its mining operations were suspended, Kudremukh Iron Ore Company (KIOCL), a public sector undertaking , is exploring opportunities to partner state-owned miners and steel makers for setting up four new pellet and beneficiation plants in India in an attempt to revive itself.
It is in talks with leading steel and mining companies like SAIL, RINL, Orissa Mineral Development (OMDC) and NMDC to set up four new pellet and beneficiation plants through separate joint ventures.
"We are in the process of drawing up plans to take up a leading position in pellet making capacity . We will shortly enter into agreements with leading steel and mine players to set up joint ventures for pellet making and beneficiation," said Malay Chatterjee , chairman and MD of HSCL who recently took over as CMD of KIOCL.
While it is keen on a tie-up with SAIL for pellet plants in Bokaro and Rourkela, KIOCL is also in talks with RINL and OMDC for a three-way joint venture in which it plans to pick up 26% stake. "While we have been hit by halt in mining, we have decided to chart our growth plans based on value addition of ore. We need to secure the future of KIOCL and its 1,300 employees," Chatterjee added.
Each of these pellet units is likely to be around 2 million tonne (mt) in capacity. KIOCL is in discussions with NMDC for a 6 mt pellet unit in Chhattisgarh. Going by the thumb rule, each 2 mt pellet unit is expected to cost around Rs 500 crore. For beneficiation plants, 1 mt capacity would cost Rs 100 crore. With reserves of over Rs 1,500 crore, KIOCL requires financial strength to participate in the projects.
When contacted, a SAIL official said the company is planning to set up pellet plants at Rourkela and Bokaro. "We are yet to firm up plans but we hope to decide on whether to go it alone or invite a partner within a month or so," the official said.
"Given the abundance of iron ore, Indian steel plants have, so far, been using lumps with huge quantities of iron ore fines lying unutilised. More recently, with constraints in mining, there is increasing realisation on conversion of fines. Hence demand for pellets is growing," Sanjay Jain, senior VP research (metals) at Motilal Oswal Securities said. Global pellet production also rose to 400 mt in 2011, from 388 mt in 2010.
While the US is a leading consumer, Brazil is a global leader in production and exports, with Canada as the second biggest exporter. KIOCL's plan if it fructifies could add 12 mt of greenfield pellet capacity . It is in line with the global trend where a number of new plants are being fast tracked.
Tata Steel, Essar Steel and JSW Steel are among domestic steel companies which have invested in captive pellet making units, along with smaller ones like Godawari Power& Ispat and Adhunik Metaliks.
KIOCL, which set up the country's first pellet plant with Iranian collaboration in the mid-70s, currently operates a state of the art 3.5 mt facility at Mangalore by sourcing haematite ore from NMDC.
KOLKATA: In a spot after its mining operations were suspended, Kudremukh Iron Ore Company (KIOCL), a public sector undertaking , is exploring opportunities to partner state-owned miners and steel makers for setting up four new pellet and beneficiation plants in India in an attempt to revive itself.
It is in talks with leading steel and mining companies like SAIL, RINL, Orissa Mineral Development (OMDC) and NMDC to set up four new pellet and beneficiation plants through separate joint ventures.
"We are in the process of drawing up plans to take up a leading position in pellet making capacity . We will shortly enter into agreements with leading steel and mine players to set up joint ventures for pellet making and beneficiation," said Malay Chatterjee , chairman and MD of HSCL who recently took over as CMD of KIOCL.
While it is keen on a tie-up with SAIL for pellet plants in Bokaro and Rourkela, KIOCL is also in talks with RINL and OMDC for a three-way joint venture in which it plans to pick up 26% stake. "While we have been hit by halt in mining, we have decided to chart our growth plans based on value addition of ore. We need to secure the future of KIOCL and its 1,300 employees," Chatterjee added.
Each of these pellet units is likely to be around 2 million tonne (mt) in capacity. KIOCL is in discussions with NMDC for a 6 mt pellet unit in Chhattisgarh. Going by the thumb rule, each 2 mt pellet unit is expected to cost around Rs 500 crore. For beneficiation plants, 1 mt capacity would cost Rs 100 crore. With reserves of over Rs 1,500 crore, KIOCL requires financial strength to participate in the projects.
When contacted, a SAIL official said the company is planning to set up pellet plants at Rourkela and Bokaro. "We are yet to firm up plans but we hope to decide on whether to go it alone or invite a partner within a month or so," the official said.
"Given the abundance of iron ore, Indian steel plants have, so far, been using lumps with huge quantities of iron ore fines lying unutilised. More recently, with constraints in mining, there is increasing realisation on conversion of fines. Hence demand for pellets is growing," Sanjay Jain, senior VP research (metals) at Motilal Oswal Securities said. Global pellet production also rose to 400 mt in 2011, from 388 mt in 2010.
While the US is a leading consumer, Brazil is a global leader in production and exports, with Canada as the second biggest exporter. KIOCL's plan if it fructifies could add 12 mt of greenfield pellet capacity . It is in line with the global trend where a number of new plants are being fast tracked.
Tata Steel, Essar Steel and JSW Steel are among domestic steel companies which have invested in captive pellet making units, along with smaller ones like Godawari Power& Ispat and Adhunik Metaliks.
KIOCL, which set up the country's first pellet plant with Iranian collaboration in the mid-70s, currently operates a state of the art 3.5 mt facility at Mangalore by sourcing haematite ore from NMDC.
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