Essar to use low-grade iron ore fines at Hazira

Thu, Jan05, 2012

Hazira: The $15 billion Essar group will become one of the first steel mills in India to use low-grade iron ore fines to make steel at the Essar Steel Hazira plant whose capacity has now been expanded to 10 million tonnes per annum from seven million tonnes per annum.

Prashant Ruia, group CEO at Essar group said, “Most of our raw material will be low-grade fines which is much cheaper. A bulk of our iron ore needs have been secured through off-take agreements with key players such as NMDC and captive mines in Jharkhand and Chhatisgarh. In addition, the iron ore benefication plants have been set up by the company to facilitate usage of low-grade iron ore fines abundantly available in the country.”

So far, iron ore fines have either been exported or dumped along with overburden, as Indian steelmakers have locked the technology to process this inferior grade raw material into iron.

Essar Steel has licensed the technology for iron ore benification from Sweden-based Metso and for pellets it has sourced technology from Germany-based Lurgi. The company refused to comment on the price it has paid for acquiring the technology. As per the current market prices using iron ore fines will help the company to reduce cost by 60 per cent, a senior company official said Ruia.

For its energy requirements, Essar has long-term power purchase agreements with Essar Power and will soon have access to cheaper coal based power from its captive plants too.

Essar is also producing ore pellets through benefication of iron ore. Every million tonnes of steel requires 1.4 million tonne pellet for manufacturing. Essar Steel will have 20 million tonne pellet making capacity operational once its Orissa benefication plant goes on stream in two equal phases starting from March 2012. The final six million tonnes at Orissa will be operational in a year’s time.

(sourced MyDigaltalFC)