The board of KIOCL Limited, formerly Kudremukh Iron Ore Company Ltd, a public sector organisation under the Ministry of Steel, has approved the technoeconomic feasibility report (TEFR) for establishing a two million tonne iron ore pellet plant in Visakhapatnam with an investment of ₹900 crore.

KIOCL Ltd, which is the leading organisation in iron ore mining, filtration technology, and production of high-quality pellets, entered into a joint venture with Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant (VSP), last year for the greenfield pellet plant.

Advantage for RINL

The supply of pellets, going by the present cost, will benefit RINL by at least ₹2,000 per tonne towards freight cost. At present, RINL is meeting its pellet requirement with supply from Mangalore.

KIOCL also sources part of its iron ore requirement from Bailadilla mines in Bastar district of Chhattisgarh.

Pellets are most preferred raw material required for steel-making and poised to play a vital role in achieving the National Steel Policy-2017 target to increase production to 300 million tonne by 2030.

In an exclusive interview, KIOCL Ltd CMD M.V. Subba Rao told The Hindu that they were expecting a detailed project report from MECON by this month-end, after which they would start work on the project in an area of 75 acres to be allotted by RINL at Ukkunagaram. The steel plant is located at Ukkunagaram.

Stating that the plant would be commissioned by 2021, he said they had supplied three lakh tonne of pellets to RINL last year.

Other projects

He said their board had cleared the proposal for setting up of a two lakh tonne ductile iron span pipe unit, two lakh tonne coke oven, and a 10 megawatt power plant using waste gases with a total investment of ₹850 crore at Mangalore. The deadline set for completing the project is 2020.

KIOCL Ltd is also exploring the possibility of establishing a 1.5 million tonne pellet plant in collaboration with SAIL Bokaro Steel Plant. Admitting that they had closed the captive mines at Kudremukh in 2006 due to environmental issues, he said they had obtained statutory clearances for mining in 475 hectares in Bellary, Karnataka. It would provide KIOCL Ltd the much-needed raw material security, he remarked. The company, which clocked a turnover of ₹1,700 crore with a profit after tax of ₹82 crore, is expecting a turnover of ₹1,900 crore.