Essar Steel completes capacity expansion at Hazira
The Essar Steel Hazira complex recently announced doubling of its capacity to 10 MMTPA (million metric tonnes per annum). This expansion makes the Hazira Steel Complex the largest single location flat steel producer in India and the fourth largest single location flat steel producer globally. With this expansion the complex will be able to offer the entire range of flat products from thin strips and thick plates to pipes, cold rolled and coated products.
On this occasion, the chairman of Essar Group, Shashi Ruia, said “We would like to dedicate this plant to the nation. When I first ventured into Hazira, it was my desire to put India on the global steel map and today that dream has come true. Our world-class steel complex is a testament to the hard work put in by the Essar family and our small contribution to the steel industry and India’s growth story.”
This steel plant will play a major role in making Gujarat a global industrial hub catering to the needs of capital and consumable goods, shipbuilding and automobile sector. Being a port-based plant, its strategic location makes it a ideal gateway for meeting the global demand for steel. Domestically the complex will provide world-class steel to meet the diverse needs of various industries, while also making the Hazira Steel Complex a national hub for Essar Steel to provide a range of steel products to the rest of the country. This is in line with the Vision 2020 that envisages taking India’s steel capacity to 200 MMTPA.
Essar has adopted an integration and securitisation strategy that has enabled it to keep its costs low even with the expanded capacity. A bulk of its iron ore needs have been secured through offtake agreements with key players like NMDC and captive mines in Jharkhand and Chhatisgarh. In addition, the iron ore beneficiation plants have been set up by the company to facilitate usage of low grade iron ore fines abundantly available in the country. For its energy requirements, Essar has long-term power purchase agreements and will soon have access to source cheaper coal based power from its captive plants. The offtake agreements combined with the captive mines and easy availability of low grade iron ore dumps provides Essar the necessary raw material security to operate its steel plant in the most cost-effective manner.
Essar has three iron making technologies – HBI/DRI, Corex and Blast Furnace. These technologies give them flexibility in their raw material inputs, be it iron ore or energy.
Essar Steel has invested over Rs 37,500 crore in the business including the recent project expansion. The industry standard for steelmaking is US$ 1 billion for a million tonnes of production. Essar Steel incurred a cost of just US$ 750 per tonne of steel, which in addition to steelmaking also includes beneficiation, pelletization and downstream capabilities. On a like-to-like basis, Essar Steel has managed to create this asset at a significantly low capital cost. In some cases, the costs are lower than other steelmakers by as much as 50%.
In early 2011, Essar Steel signed the World Steel Association (WSA) Sustainable Development charter which evaluates economic, social and environmental sustainability of an organization. On most parameters we were either on par or better than the WSA peer group. As an organisation we are conscious of the impact of our products and services on the environment. In 2010, we conducted the Life Cycle Impact Assessment of Hot Rolled Coil (HRC) as per ISO 14040:2006 and ISO 14044:2006.