Two Chinese firms in race to build Kudremukh ductile iron plant

July 3rd, 2008 - 5:22 pm ICT by IANS  

By Fakir Balaji
Bangalore, July 3 (IANS) Two Chinese firms and their Indian partners have pre-qualified to build a Rs.2.25 billion ductile iron spun pipe plant on a turnkey basis for the state-run Kudremukh Iron Ore Co. Ltd (KIOCL), the company’s top official said here Thursday. “Two Chinese joint venture firms have pre-qualified for techno-commercial evaluation,” Kudremukh’s new chairman and managing director K. Ranganath told IANS.

The process will be completed by this month-end and the bids will be opened for ascertaining the quoted price, Ranganath said.

The lowest bidder will be short-listed for executing the project in 20 months, he added.

The company had received five bids from overseas and Indian firms following its global tender floated in April, Ranganath said.

The joint venture firms in race for the Rs.2.25-billion project are China National Metal Products and Dalian Wanton Industrial Equipment Co. Ltd.

The Chinese firms tied up with the Chennai-based Sigma Minmet Ltd and the Mumbai-based L&T’s engineering and construction group (ECG) to bid for the project.

The new 100,000-tonne per annum plant will be located near KIOCL’s pelletisation facility in Mangalore.

The turnkey project also involves technology transfer by the successful bidder to KIOCL for operating the new plant and its subsequent expansion to meet the growing domestic market.

Spun pipes - extensively used for irrigation, drinking water supply and sewage system - made at the new facility will use pig iron, superior to cast iron.

“There is a huge market for ductile iron spun pipes across the country for irrigation projects, drinking water supply and sewage structures, mainly because of its durability and non-corrosive quality,” Ranganath said.

The annual demand is projected to go up to one million tonnes from 700,000 tonnes presently over the next two-three years.

Currently, two private sector firms - Electrosteel and Jindal Steel Works - manufacture ductile iron spun pipes.

KIOCL will procure the raw material, hematite ore fines, for processing pig iron from Donnamalai mines of the state-run National Mineral Development Corporation in Bellary district, as its own captive mines at Kudremukh have been shut since Jan 1, 2006 following a Supreme Court order.

“We already procure 2.5 million tonnes of iron ore each year from the NMDC mines to manufacture high grade iron oxide pellets from the existing plant for export and domestic markets,” Ranganath said.

Following the closure of its captive mines, the pellet plant currently operates at about 50 percent of its 3.5-million tonne per annum capacity, he added.

Iron oxide pellets are used by high-tech steel plants the world over.

The new plant will generate additional revenue to offset the huge operational loss incurred due to the closure its captive mines and the consequent stoppage of manufacturing iron ore concentrate (fines) for export markets.

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