Manganese Ore plans plant in AP

Public-sector Manganese Ore (India) Limited (MOIL) will be setting up a 75,000-tonne capacity ferro alloy plant in Andhra Pradesh with an investment Rs 150 crore. This is the second such plant proposed by the company in the country.

MOIL has chosen Bobbili in the north coastal Andhra region for the plant due to its close proximity to rail and port facilities. This apart, the power subsidy being offered to ferro alloy units by the state made it the preferred destination, Kishan Lal Mehrotraa, chairman-cum-managing director, of the company, said.

While the one-lakh tonne capacity ferro alloy plant at Rs 250 crore investment proposed by MOIL as a 50:50 joint venture with Steel Authority of India Limited (SAIL) at Bhilai, Chhattisgarh, is expected to be completed by mid-2009, the Andhra plant would be up and running in two years, Mehrotraa said. The company currently has a small ferro alloy plant with 10,000 tonne capacity at Balagarh in Madhya Pradesh.

The state-owned Andhra Pradesh Industrial Infrastructure Corporation (APIIC) recently allotted 100 acres of land to the MOIL at Bobbili, which is being developed as a growth centre in the backward Vizianagaram district. The company has also paid a part of the Rs 7.3 crore price fixed towards the land.

The company proposes to set up a 16.5-MVA furnace for ferro manganese and a 27-MVA furnace for silico manganese at the Bobbili facility, which would produce 30,000 tonne and 45,000 tonne of the ferro alloys respectively.

These form an essential raw material for steel making as for the production of every one tonne of steel around 15 kg of ferro alloys is required.

Speaking to Business Standard, BP Acharya, vice-chairman and managing director, APIIC, said MOIL's decision is a welcome development since its presence would attract a host of ancillary industries into this backward region.

Value-addition is part of the company's diversification plans, which is focused on a single commodity of manganese ore, commanding close to 60 per cent of the country's market share with 1.2 million tonne of the 2 million tonne production.

The company plans to step up production to 3 million tonne by the year 2009-10 by increasing the output in its existing mines and also by expanding its operations to Orissa.

"While planning to enhance the manganese ore production in line with the growing demand for the same from the steel industry in the country, we are also going for value-addition because if we remain a single commodity entity, it will be difficult to take our growth plans forward," the MOIL chairman said.

The company, which reported a turnover of Rs 450 crore turnover last year, is also nurturing a dream of overseas foray by setting up a ferro alloy plant in South Africa in collaboration with global mineral behemoth BHP Billiton.

"It makes a great sense in setting up a ferro alloy plant in South Africa, which has almost 80 per cent of the world's manganese reserves at 4 lakh million tonne deposits, as compared with 116 million tonne reserves in India. This is all the more necessary because India has already been meeting its requirement partly through imports and this is going to increase further as the steel production is projected to touch 80 million tonne from the present 50 million tonne in the four years," Mehrotraa said.

The company is yet to firm up plans with regard to South Africa plant as it requires statutory clearances by the government.

Besides looking at importing manganese ore from the overseas mines of BHP Billiton, the company is exploring the opportunities in chromite and rock phosphate mines overseas, he said. Currently, close to 3 lakh tonne manganese ore is being imported by private players annually.

The company expects to achieve Rs 310 crore turnover during the first six months of the current financial year, a big jump, as compared with Rs 450 crore for the full year in 2006-07, according to Mehrotraa.