Jindal Steel lines up Rs 8,000 crore investment for its Odisha project

It also intends to lay a pipeline from the point of sourcing iron ore at Barbil in Keonjhar district to its Angul plant at a cost of Rs 800 crore

Navin Jindal-owned Jindal Steel and Power Ltd (JSPL) has lined up Rs 8,000 crore additional investment for its Odisha operations. The money will be spent on the addition of a blast furnace to take its Angul steel plant capacity to 6 million tonne, setting up of a cement plant, laying of the slurry pipeline to carry iron ore from mines to the steel plant and setting up of a pellet plant.

At present, JSPL has a two million tonne steel making facility at Angul through sponge iron route. To produce sponge iron, the company had set up a DRI plant based on coal gasification technology, the first of its kind in the country, that aimed to use locally available high ash coal for direct reduction of iron.

In fact, the company proposed to produce six million tonne steel at the location based on this coal gasification technology imported from Lurgi, South Africa.

However, the cancellation of Utkal 1B block allotted to the company following de-allocation of coal blocks by the Supreme Court in 2014, has forced it to go for process re-engineering to achieve the intended 6 million tonne steel capacity.

Instead of sponge iron route, it has decided to go for blast furnace route to scale up steel capacity to 6 million tonne. For the purpose, it is putting up a 4554 cu mtr blast furnace, claimed to be largest in the country with a capacity to produce 11,000 tonne of steel per day.

The blast furnace is expected to be ready for commissioning by the end of the current financial year. So also other associated facilities, such as coke oven to produce metallurgical coke and BoF (basic oxygen furnace) plants, the work of which are in progress. The capacity of steel melting shop is also being enhanced with the addition of a furnace of 3 million tonne capacity.

The total expenditure incurred on the all these new components required to raise the steel-making capacity at Angul from 2 million tonne to 6 million tonne is estimated at about Rs 6,000 crore.

Besides, the company also intends to lay a pipeline from the point of sourcing iron ore at Barbil in Keonjhar district to its Angul plant at a cost of Rs 800 crore. This will reduce the ore transportation cost substantially from Rs 800 per tonne to about Rs 200 per tonne, said Damodar Mittal, executive vice president, projects.

Taking advantage of this cheaper mode of ore transport, the company plans to set up a 4 million tonne per annum pellet plant at Angul with an investment of Rs 1,000 crore. The pellet plant can feed the existing DRI plant at the location and cut cost towards transportation of pellet from the company's Barbil plant to Angul, a distance of 280 Kms.

Similarly, using the slag produced from the blast furnace, the company proposes to set up a cement plant close to its steel mill for which an expenditure of Rs 200 crore has been earmarked.