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KIOCL to set up pellet plant in Andhra Pradesh

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KIOCL Ltd, a mini ratna PSU under the Union ministry of steel, plans to establish a pellet plant of one million tonne per annum (mtpa) capacity through a joint venture (JV) with Andhra Pradesh Mineral Development Corporation (APMDC) in Ananthpur district (Andhra Pradesh). The pellet plant, to cost Rs 1000 crore, is expected to be operational in 2017.

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KIOCL had already signed a memorandum of understanding (MoU) with APMDC in 2013 for the proposed plant.

“APMDC has become the first PSU to bag prospecting license (PL) over Nemalkal iron ore mines under the PSU dispensation route after the enactment of Mines and Minerals (Development & Regulation) MMDR Act, 2015. Both APMDC and KIOCL would jointly explore the mines having magnetite deposits of 40 million tonne”, said Malay Chatterjee, chairman cum managing director (CMD), KIOCL Ltd.Chatterjee said, the pellet plant would cost Rs 1000 crore, out of which the equity component is pegged at Rs 300 crore.

“APMDC has evinced interest to pick up equity in the pellet project. It can be a 51:49 JV between KIOCL and APMDC”, he said.

KIOCL currently operates four mtpa pellet plant at Mangalore (Karnataka).

Chatterjee said, pellet makers were in the soup due to cheaper imports from China and also devaluation of Chinese currency Yuan.

Imported pellets are being sold in the country at Rs 4500 per tonne while domestic production cost works out to Rs 6500 a tonne. According to Pellet Manufacturers Association of India (PMAI), large quantities of iron ore fines, pellets and steel products are being imported to the country, forcing pellet and steel manufacturers to cut capacities. Pellet makers across the country are operating at barely 35 per cent of their installed capacity of 83 mtpa.

KIOCL, meanwhile, is in the race to pick up controlling stake in the ailing Odisha government PSU Industrial Development Corporation of Odisha Ltd (Idcol).

“We are keen on having 51 per cent stake in two units of Idcol. I had a meeting with the Odisha chief secretary in this connection. The two units are- Idcol Ferrochrome Alloys Ltd (IFAL) and Idcol Kalinga Iron Works Ltd (IKIWL). We are in the process of doing due diligence of the two units and expect to be ready with the valuation soon. KIOCL would convey its decision to the Odisha government by the end of September”, said the KIOCL CMD.

KIOCL is keen to set up a pellet unit at iron ore rich Barbil of two mtpa capacity.

Central PSUs like Steel Authority of India Ltd (SAIL) and National Aluminium Company (Nalco) are also keen to take up stakes in the Idcol units.


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