Date | Dec 27, 2017:

After Tata Steel’s board decided to freeze the final capacity of the Kalinganagar greenfield steel plant at 8 million tonnes per annum (mtpa), the company is firming up iron ore sources to meet the enhanced requirement. The expansion from 3 mtpa to 8 mtpa will cost Tata Steel Rs 23,500 crore.

The project configuration and costs include investments in raw material capacity expansion, upstream and midstream facilities, and infrastructure and downstream facilities, including a cold rolling mill complex.

Tata Steel’s captive iron ore mines at Khandabandh will be dedicated exclusively to the Kalinganagar steel project. The steel major is investing Rs 2,400 crore to expand the capacity of the Khandabandh mines from 1 mtpa to 5 mtpa.

“We expect to receive consent from the state pollution control board shortly to expand capacity of the Khandabandh iron ore mines. Apart from the Khandabandh mines, our captive mines at Joda East and Noamundi will also cater to the Kalinganagar plant’s requirements,” said a source in Tata Steel. After reaching its full design capacity of 8 mtpa, the Kalinganagar plant will need 13.6 million tonnes of iron ore annually. Tata Steel is also planning to participate in auctions of iron ore blocks by the Odisha government.

Earlier, the company unsuccessfully bid for three iron ore blocks in e-auctions. The blocks were won by Essar Steel, Bhushan Steel and Bhushan Power & Steel. Tata Steel is also examining the possibility of clinching a long-term pact with state-owned Odisha Mining Corporation (OMC) to secure iron ore for its Kalinganagar plant. On a trial basis, the steel-maker has signed an agreement with OMC valid for one year. Tata Steel expects to commission expansion at Kalinganagar in 48 months from the date of commencement of construction.

The second phase capacity addition is planned to meet the requirements of automotive, general engineering and other value-added segments.

Tata Steel has conducted successful trials and started supplies to global leaders in the lifting and excavation segment. It also has approvals from an oil marketing company for supply of API grade steel.

Products manufactured at Kalinganagar will help establish Tata Steel as a major player in the large diameter water pipeline segment besides strengthening its presence in the construction sector.

At Kalinganagar, the steel company is looking to tap emerging, value-added products and segments like construction and projects, pre-engineered buildings, oil and gas, lifting and excavation, and shipbuilding. The new segments are expected to account for 30 per cent of total sales from the Kalinganagar plant.

At present, the Kalinganagar facility is servicing segments like HR (hot rolled) commercial, LPG cylinders, precision tubes and the railways. The superior hot strip mill (HSM) at Kalinganagar when compared to Jamshedpur, both in width and tensile strength, is capable of addressing an array of customer requirements. The mill has developed high-end application products such as HS 800, DP 600, API X70/X80 and S355 for the lifting and excavation segment.

Roadmap to 8-million tonne capacity

• Tata Steel board has approved expansion of Kalinganagar plant to 8 mtpa
• Company investing Rs 23,500 cr on crude steel expansion
• To secure iron ore supplies, the company is investing Rs 2,400 cr on expanding Khandabandh mines capacity to 5 mtpa
• Tata Steel’s mines at Joda East and Noamundi will also meet Kalinganagar’s requirement
• The company also looking at participating in e-auctions of iron ore blocks

(Source: http://www.business-standard.com/)