KIOCL to sign pact soon with Iran's Gol Gohar mines

KIOCL Ltd, a mini ratna PSU under Union mines ministry said, it would soon enter into a pact with Gol Gohar mines, one of the largest mines in Iran. Under the arrangement, iron ore fines would be imported from Iran and converted to pellets at KIOCL facility at Mangalore (Karnataka).

Malay Chatterjee, chairman and managing director (CMD) of KIOCL said, “The first shipment of 50,000 tonne of iron ore fines from Gol Gohar mines in Iran is expected to arrive in September this year. KIOCL would make pellets from the fines and export them to Iran. We are going to sign an agreement shortly with Gol Gohar mines wherein KIOCL would source one million tonne of iron ore fines every year.”

He said, the KIOCL pellet making facility is strategically located close to the Mangalore port and iron ore shipment from Iran would take only four days to reach the plant. KIOCL runs a four million tonne pellet making plant at Mangalore.

Gol Gohar mines contains six ore bodies spread over an area of 40 sq km. The total deposits of iron ore in the region are estimated to be over 1.135 billion tonne. The major ore body has a deposit of more than 650 million tonne. Chatterjee said, pellet makers were facing a tough time due to spate of cheaper imports from China with the situation worsening further due to devaluation of Chinese currency Yuan.

Imported pellets are being sold in the country at Rs 4,500 per tonne while domestic production cost works out to Rs 6,500 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 two units of the ailing Odisha government PSU Industrial Development Corporation of Odisha Ltd (Idcol). The pellet maker is interested to pick up 51 per cent stake in Idcol Ferrochrome Alloys Ltd (IFAL) and Idcol Kalinga Iron Works Ltd (IKIWL).

KIOCL is now undertaking due diligence of the units and expects to convey its decision to the state government by the end of September. KIOCL is also keen to set up a two mtpa pellet plant at iron ore rich Barbil.