Financial Daily from THE HINDU group of publications
Monday, Oct 04, 2004
Columns - On the move
Moving iron ore for steel plants South-Eastern Railway on fast track
Iron ore being loaded into wagons.
Not any more, because of the trifurcation of the zone. The SER, which handled around 69 mt in 2003-04, hopes to hit the 100-mt mark by 2006-07.
What is the basis of such optimism? The answer is not difficult to find. At least three steel plants Tata Steels, Bokaro and Rourkela, wholly, and Durgapur and IISCO, partially, are dependent on the SER for movement of their raw materials. And all these plants have embarked on capacity expansion programmes Tata Steel's Jamshedpur plant from 4 mt to 5 mt immediately and to 7.5 mt by 2007-08; all the four SAIL plants together from 13.24 mt to 19.6 mt by 2011-12; Bhilai from 5 mt to 7 mt; Durgapur from 2 mt to 3.2 mt; Rourkela from 1.8 mt to 2.9 mt and Bokaro from 4.2 mt to 6.5 mt.
The expanded capacity will push up Tata Steel's Jamshedpur plant's raw material requirement to 23 mt by 2007-08 of which iron ore alone will be about 12 mt. Similarly, SAIL's requirement of raw materials for the four plants will rise to 43.16 mt by 2011-12 including 32.5 mt of iron ore.
Smooth transportation of iron ore from the mines to the plants, undertaken entirely by rail for both Tata Steel and SAIL plants, is going to be critical. But, then, transportation of iron ore also presupposes augmentation of facilities at both loading and unloading points. It is just not enough to have a few additional wagons and locomotives. Tata Steel has captive iron ore mines at Noamundi, Joda and Khondbond. The production in at least two of these places, particularly Noamundi and Khondbond, will be increased substantially, not only to meet the requirement of the Jamshedpur plant but also of others.
Since the operation in the mine area is taken care of by Tata Steel itself, several steps have to be taken by the company to increase the loading capacity in the form of improved system to facilitate loading of larger volumes at greater speed. For example, engine-on-load system may be one option. On its part, the SER is to augment its yard capacity and the capacity of rolling stock, both wagons and locomotives. The SER plans to double the railway network in the 35-km Banspani-Dongaposi stretch at a cost of Rs 100 crore, to help iron ore movement for Tata Steel initially and others subsequently when the Banspani-Daitari line, now under construction, will be ready for operation.
The Railways is equally keen that the facilities at the unloading points too are adequate. The raw materials (except imported coal) required by Tata Steel's Jamshedpur plant are generally handled at Adityapur station (near Jamshedpur) whose capacity is being increased. At the unloading point, the facilities are being created for handling both BOBR (bottom discharge) and BOBS (side discharge) wagons. BOBR wagons are generally used for transportation of coal and BOBS for iron ore. The capacity of the Tatanagar station where Tata Steel handles the evacuation of finished products as also imported coal is being expanded.
SAIL, on the other hand, according to Railways sources, is yet to firm up its plans for sourcing and transportation of the additional volume of iron ore projected to be needed to meet the targeted capacity expansion programmes. Thus, Bhilai plant's requirement of ore is to go up to 11.6 mt from the present 8.5 mt, Durgapur plant's to 5.3 mt (3.2 mt), Rourkela plant's to 4.9 mt (2.8 mt) and Bokaro plant's to 10.7 mt (6.6 mt) or 11.4 mt cumulatively by 2011-12 over the present level of 21.10 mt for all the steel plants together.
Interestingly, all SAIL plants are looking forward to development of the Chiria mines now under IISCO. The present production of Chiria mines is a meagre 0.7-0.8 mt but the target is to raise the production to the level of an estimated 10 mt annually keeping an eye on the projected additional requirement of all the four plants. If the Rowghat iron ore mines project, to be linked to Bhilai plant, does not materialise, then the production at Chiria has to be further stepped up because Bhilai's requirement of ore is to rise to more than 11 mt from 8.5 mt now.
Right now Durgapur sources its iron ore from Bolani mines whose capacity is being expanded but the Railways is not sure if the increased production of Bolani will be enough to meet the entire additional requirement of the Durgapur plant. Rourkela now sources ore from Barsua and Roxi mines whose capacity cannot be augmented sufficiently to take care of the increased ore requirement of the plant, it is felt. Rourkela therefore looks forward to Chiria. Bokaro plant gets the ore supply from Kiruburu and Meghataburu. The loading at these mines, it is felt, can be stepped up by 20 to 30 per cent without much difficulty.
The Railways, it may be noted, has already sanctioned a Rs 190-crore project involving construction of a third line between Golikhera and Manoharpur covering a stretch of 40 km to boost iron movement from the Chiria mines. Though it is a sanctioned project, the work on it is yet to be taken up in right earnest, presumably because of the delay in starting work on the mine project by the steel authorities.
Several other projects holding out the promise of large volumes of iron ore movement are proposed to come up in the region. For example, the Jindal's proposed plant at Deojhar will need about 3.2 mt of ore, Essel Mining and Industries Limited's unit at Jaruli will need to evacuate about 1.5 mt, Neepaz Metaliks on the Rourkela-Birmitrapur section 0.54 mt, and a new siding of Tata Steel at Jaruli two mt. The work on a new bypass line at Rajkharswan has been taken up at a cost of Rs 10 crore to boost the iron ore throughput to 12 mt from the present 5-6 mt for transportation beyond Jharsuguda.
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