Essar to set up Rs 800 cr pellet plant in Orissa

The Essar group has decided to set up an 8-million-tonne-per-annum (tpa) pellet plant as a part of its integrated steel unit in Orissa.

Confirming the development, Jatinder Mehra, resident director of the Essar group, said commercial operations at the plant would begin 30 months after the financial closure.

The investment for the pellet project was expected to be around Rs 800 crore, industry sources said.

The group's overseas investment arm Essar Global, which is implementing the 5-million-tpa integrated steel project in Orissa, will also set up the pellet unit. The total cost of the integrated project is pegged at Rs 10,700 crore.

Essar Global has bought 100 acres of land, and will soon start work on the pellet plant. The group's only existing pellet plant"" the 8-million-tpa unit in Visakhapatnam "" has an output of around 6.5 million tpa.

The plant is not able to achieve its total production capacity due to a shortage of iron ore. It procures iron ore from the Balladila mines of the National Mineral Development Corp (NMDC).

India's annual pellet production stands at around 14 million tonne. In addition to the Essar group's output of 6.5 million tpa, JSW Steel manufactures 4.5 million tpa, Kudremukh Iron Ore Company, 2 million tpa, and Mandvi Pellets, nearly 1 million tpa.

The proposed plant will supply finished products to the group's integrated project in Orissa, as well as to the Hazira unit.