Stemcor secures finance for Brahmani River Pellets
Stemcor, the world’s largest independent steel trader, has achieved financial closure on its $365m Brahmani River iron ore pelletisation project in Orissa, India. A total of $245m has been secured in debt, with SBI Capital Markets as the lead arranger, while Stemcor will fund the remaining $120m through equity. Pellet production is set to commence in 2009.
The 4m tonne per annum pelletisation plant, located at Kalinga Nagar in Jaipur district, will be connected by a 220km slurry pipeline to the beneficiation plant at Barbil in Keonjhar district, the heart of Orissa’s iron ore mining industry. Using proven technology, low grade iron ore fines from existing local mines will be converted into high grade pellets for use by the region’s steel producers.
Kalinga Nagar, in the eastern state of Orissa, is expected to become a 13,000 acre industrial centre and home to more than a dozen mills producing 25 million tonnes of steel per annum. It is the destination for steel producers including Neelachal Ispat, Mesco Steel, Tata Steel, Visa Steel and Jindal Stainless.
Several mills have submitted letters of intent to source pellets from Stemcor and the demand is such that the order book for at least 75 per cent of the projected capacity has already been secured. It is expected that two thirds of output will be consumed by India’s domestic steel industry, with the balance exported through Stemcor’s international network.
Stemcor trades approximately 10m tonnes of steel-making raw materials per annum. In August, Stemcor completed the sale of a majority stake in its Tasmanian iron ore mine and 2m tonne pellet plant to Shagang Mining Pty Ltd, an Australian subsidiary of China’s Jiangsu Shagang Group Co. Ltd.