KIOCL to invest ~25 bn to set up pellet unit in Visakhapatnam

KIOCL, formerly known as Kudremukh Iron Ore Company Ltd, is planning to invest about ~25 billion in setting up a 1.2 million tonne pellet plant in Visakhapatnam, apart from diversifying its product portfolio to add Ductile Iron (DI) Spun pipes in the near future.

The company, which had been badly hit after losing its iron ore mining lease in the ecosensitive Western Ghats, had got approval for allocation of a mining lease spreading over 474 hectares in Ballari district of Karnataka last year.

Allocation of a captive mine has provided much needed respite to the state-owned entity, which is operating a 3.5-million tonne per annum pellet plant in Mangaluru.

“KIOCL will set up a pellet plant in Vizag, which will then supply it to the nearby steel unit run by Rashtriya Ispat Nigam Ltd (RINL). The surplus pellet will be exported from the port city,” Union Steel Minister, Chaudhary Birender Singh, has said. According to a senior official at KIOCL, for the proposed pellet plant in Visakhapatnam, iron ore will be sourced from Karnataka.

After incurring losses in 2015-16 due to absence of captive mines, the firm had turned around to post a net profit of ~479 million in 2016-17.

In the last financial year ending March 2018, net profit of the company rose by 70 per cent to ~815 million as against ~479 million reported in the same period of last fiscal. Its total sales also showed an uptick to increase by 80.5 per cent to ~15.70 billion in FY18 against ~8.7 billion reported in the previous fiscal. Meanwhile, the company is also slowly diversifying its product portfolio to boost profitability. As part of this initiative, KIOCL is planning to manufacture DI pipes.