Iron and Steel

India: Tata Sponge Eyes to Participate in Upcoming Odisha Block Auctions

India: Tata Sponge Eyes to Participate in Upcoming Odisha Block Auctions
Mining News Pro - In order to ensure raw material security, the company plans to participate in iron ore block auctions to secure captive mines. Currently it is primarily sourcing ore from Tata Steel.
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According to Mining News Pro -In order to ensure raw material security, the company plans to participate in iron ore block auctions to secure captive mines. Currently it is primarily sourcing ore from Tata Steel.

Odisha based Tata Sponge Iron limited plans to purchase iron ore amounting INR 350 crore for financial year 2018-19 which was decided in a recently concluded board meeting. Company also plans to purchase of coal worth INR 300 crore in 2018-19.

Few days back, company went through raw material shortage. To ensure raw material security, iron ore would be purchased from Tata Steel for the value of INR 350 crore each for the financial year 2018-19 and financial year 2019-20. Coal will be purchased from Tata International Singapore PTE limited. Company seeks INR 150 crore from shareholders to purchase of additional quantity of coal in view of the planned increased production and volatility in the price of coal during 2018-19 and 2019-20.

Though company purchased iron ore from Tata Steel from its inception, now Tata Sponge Iron looks for acquiring own iron ore and coal mines. Company plans to participate in the upcoming auction process to secure mines for itself.

A spokesperson of the company said that, “Though we went through raw material scarcity but there was no impact in sponge iron production. We made alternate arrangements to purchase iron ore from other suppliers.”

Tata Sponge Iron also looking for other viable options to secure raw material availability beyond Tata Steel. If any company or merchant miner gives more discount and quality iron ore, then company may not hesitate to take a call on that option. But, from its inception around 30 years ago, it has been dependent on the iron ore supplied by Tata Steel.

The company is planning to add 30-35,000 MT to its current sponge iron capacity of 3,90,000 MT. For planned capacity enhancement it need more iron ore and coal.

Tata sponge Iron also has a plan to set up a 1.5 million tonne capacity Greenfield Steel Plant in Joda of Keonjhar district of Odisha. Company earmarked Rs 3000 crore investment for the new plant. Company has applied for forest and environmental clearance from Government of India. The company is looking to set up a blast furnace and expects the integrated steel plant to be ready in the next four years. Company will execute the upcoming steel project in two phases. In first phase, company will go for 0.6-0.8 million tonne capacity.

Spokesperson also said that, “quality of iron ore from Tata Steel mines is more reliable and does not require further beneficiation by Tata Sponge before feeding to the plant. Tata sponge has primarily purchasing iron ore from Tata Steel. Tata Steel also gives commercial discount over and above the e-auction price of iron ore notified by Orissa Mining Corporation.”

“Company has been operating the Sponge Iron Plant at over 100% capacity utilization, while the overall industry utilization rate in the country is about 70%. Iron ore constitute approximately 45% of total raw material cost. Quality iron ore helps in controlling the operating parameters in sponge iron Kilns, which leads to increased campaign life of kilns, thereby increasing the productivity and profitability of the company.” he added.


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