Essar Steel, JSPL and state-run KIOCL have evinced interest in participating as the partner in the Rs 2,200-crore joint venture between NMDC and RINL for setting up a 450-km slurry pipeline and a pellet plant.
"It is understood that Essar Steel, JSPL and KIOCL responded against the Expression of Interest issued by NMDC for joining as the third partner in the project for slurry pipeline and pelletisation Plant," a highly placed source in Steel Ministry told PTI.
Rashtriya Ispant Nigam Ltd and iron ore producer NMDC, two state-run firms under the administrative control of the Steel Ministry, in May last had year singed an MoU for the proposed equal venture to make it a win-win for both.
However, NMDC later wanted to induct a third partner and entrusted with the job of operating the project and give it some equity stake.
The slurry pipeline that would run between Jagadalpur in Chhattisgarh to Visakhapatnam in Andhra Pradesh would be used to transport iron ore. The pellet plant would be ten million tonnes per annum capacity.
While Essar Steel and Jindal Steel and Power (JSPL) did not comment on the development, Malay Chatterjee Chairman and Managing Director of KIOCL (formerly Kudremukh Iron Ore Company Ltd) said the company was most suitable as the third partner as it has the requisite experience and exposure to operate pipeline.
The issue of induction of the new partner would require approval of the Steel Ministry. The route survey for the pipeline would be completed by the end of next year, the source said.Out of the total investment, Rs 1,200 crore would be used to lay the pipeline having a capacity of 10 mtpa and the rest Rs 1,000 crore for setting up the pellet plant.
The pipeline, which will pass through Chhattisgarh, Odisha and Andhra Pradesh, would be operational by 2015-16 and save a lot of transport costs for the firms involved and will be routed through the national highways to avoid insurgency problems.
The pipeline would ease RINL's expenditure on transport and at the same time, increase NMDC's evacuation capacity. NMDC has plans to increase its production capacity from the Bailadila sector from current 25 mtpa to 50 mtpa.