Date | Oct 25, 2016:
In what may be a game changer for the Indian steel industry, the National Democratic Alliance government plans to construct slurry pipelines through which iron ore, the key raw material can be transported at a lower cost.
These pipelines originate at the mines and ores after being mixed with water can be pumped to its destination. At present, railways and roads are used for transporting ores.
The solution being explored is aimed at capping the spiralling transportation cost and was discussed in a recent meeting of steel producers including Tata Steel Ltd, JSW Steel Ltd, Essar Steel Ltd and state-owned Steel Authority of India Ltd (SAIL) with steel secretary Aruna Sharma.
“Slurry pipelines can play a big role in transportation of iron ore as it is quickly constructed and is the best alternative for railways for places where there are connectivity issues. Also, there are lot of issues related to loading, unloading of rakes and freight,” a senior government official said on condition of anonymity.
The official added that it has been decided that slurry pipeline requirements will be obtained from all agencies, and work related to layout and design will be framed.
This comes in the backdrop of the Rs.3.1 trillion debt-laden Indian steel industry reeling under deep financial stress due to a fall in demand and cheap imports from China. Slurry pipelines are considered cost-effective and easy mode of transportation which eases significant pressure on rail and road network. Also, the model creates minimal environmental impact.
Essar Steel Ltd has constructed an iron ore slurry pipeline, which supplies slurry to the company’s plants at Visakhapatnam and Paradip from its iron ore beneficiation plants located at Bailadila and Dabuna in Odisha, respectively.
Also, state-run National Mineral Development Corp. Ltd (NMDC) is working to lay a slurry-cum-water-pipeline between Bacheli and Nagarnar as well as Kirandul to Bacheli to feed its steel unit in Chhattisgarh. NMDC is constructing a slurry pipeline from Bailadila to Visakhapatnam. This will be used to feed iron ore fines to Rashtriya Ispat Nigam Ltd’s plant in Visakhapatnam.
“There is already a pending report in the ministry of steel which advocates construction of slurry pipeline via a common government investment. Also, it had been thought of that there should be not a single beneficiary of the pipeline and thrust should be to create a grid,” another government official aware of the development said requesting anonymity.
This comes in the backdrop of the National Democratic Alliance government continuing its protectionist measures to support the domestic steel industry including extending the minimum import price on 66 steel products by another two months till 4 December. This is being done to save the domestic steel industry from cheap imports, especially from China.
Various investment models were also discussed for these pipelines, including captive, private, government and public-private-participation model, the official added.
Experts, however are not convinced with the efficacy of the solution.
“For cost-effective steelmaking, there is a need for extensive use of sinters, which cannot be taken through pipelines. Hence, this matter needs to be looked upon from a different angle,” said Rana Som, former chairman and managing director of NMDC.
Queries emailed to the spokespersons of the ministries of steel and railways, Tata Steel, JSW Steel, Essar Steel, NMDC and SAIL on 24 October remained unanswered.
India’s steel industry is valued at around $100 billion and contributes around 2% to the country’s gross domestic product (GDP). India is the world’s third-largest steel producer with 89 MT of production capacity after China (804 MT) and Japan (105.2 MT). The government is projecting a GDP growth of 7-7.75% in the current financial year.
(Source: http://www.vccircle.com/)