Indian Railways, Steel Ministry ink unique deal, transport costs of slurry to fall

The steel ministry has signed a unique way-leave agreement with the railways under which slurry pipelines will be laid alongside railway tracks.

By: Surya Sarathi Ray | New Delhi | Published: December 19, 2016 

A slurry pipeline is intended for transportation of iron ore fines subsequent to its conversion to iron ore concentrate in the slurry form. (PTI)

The steel ministry has signed a unique way-leave agreement with the railways under which slurry pipelines will be laid alongside railway tracks, a move which will bring raw material transportation costs down by 20-35% for pellet manufacturers. It will also reduce pressure on the railway infrastructure and environmental degradation.

A slurry pipeline is intended for transportation of iron ore fines subsequent to its conversion to iron ore concentrate in the slurry form. The transpiration of iron ore lump and fines to iron making units and ports is now done mostly through the railways from their respective linked sources. This puts pressure on the railway infrastructure.

The situation is expected to aggravate considering the fact that India is looking at ramping up its installed steel capacity to 300 MT in the next 14-15 years.

Pellet manufacturing clusters are spread across mineral bearing states such as Odisha, Jharkhand, Karnataka and Goa. While it takes R4 for every tonne of fines transportation by road and R2.5 by the railways, it would be just 75 paisa per tonne for carrying fines through slurry pipelines.

“The railways has given us permission for the first time to lay slurry pipelines across the rail lines. Fines will be carried through slurry pipelines. This will reduce the transportation cost by 1/3-1/5th of the pellet industry. This is being done to ensure that they don’t pay the transportation cost of finished products,” steel secretary Aruna Sharma told FE.

Following repeated representation from pellet manufacturers on the merits of the laying of the slurry pipeline along the existing railway lines, the steel ministry had asked state-run consultancy firm Mecon to assess the feasibility of setting up pipelines across the railway lines.