JSW Steel Ltd has been operating its 12 million tonne per annum (MTPA) integrated steel plant at Vijayanagar works in Karnataka. The plant has been set up with substantial investments relying upon a consistent supply of iron ore at a fair price.
Taking advantage of the scarcity of iron ore in Karnataka and inability of the user industry to source iron ore from outside Karnataka due to prohibitive freight cost, the mining companies are squeezing the iron and steel industry which is already under severe margin pressure. Transportation of iron ore through Slurry Pipeline is an environmentally friendly initiative and globally this shift towards pipeline transportation is evident. Accordingly, the proposed Slurry Pipeline not only contribute to alternate sourcing of iron ore from outside Karnataka at competitive price but is also highly environment friendly with no pollution.
As the availability of iron ore at a fair price within Karnataka is of paramount importance for long term sustainability of the company and environment friendly transportation of iron ore, the Board of Directors has given an approval to set up a Slurry Pipeline to transport iron ore from coastal Karnataka to the Vijayanagar works.
This Slurry Pipeline can be set up within 24 months at an estimated cost of `2,100 crore. This will facilitate transporting iron ore through Slurry Pipeline at a very competitive 15 per cent cost of alternate means of transport. This strategic project will enable the company to source almost 50 per cent of the current requirement of iron ore at Vijayanagar works from outside Karnataka either from imports or from Odisha/eastern sector at prices lower than the prevailing prices in Karnataka. The only way to check this arbitrary pricing of iron ore in Karnataka is to increase the supplies from alternate sources. JSW Steel will work towards establishing the slurry pipeline in a time bound manner. Simultaneously, the company is also exploring the feasibility to set up slurry pipelines for transporting coal from coastal Karnataka to Vijayanagar works.