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DSP signs coal conversion agreement with DPL

Durgapur, October 02, 2004

Durgapur Steel Plant (DSP) of the Steel Authority of India Ltd (SAIL) has signed an agreement with Durgapur Projects Limited for conversion of its imported coking coal into Blast Furnace-grade metallurgical coke, including all undersize fractions of below 25 mm size. The agreement was signed in a simple ceremony at Durgapur House by Dr. S.K. Bhattacharyya, Managing Director, DSP, and Mr. K.K. Khanna, Director (Technical), SAIL, and Mr. S.P. Dutta, Managing Director, DPL, on October 2.

Terming it as a momentous occasion, Dr. Bhattacharyya stated that the agreement would provide benefits to both the companies and would be an excellent example of synergy between two different organisations. DSP, through SAIL’s Operations Directorate, would provide 25,000 to 30,000 tonnes of coking coal per month in the proportions of 65% hard and 35% soft from the current month by rail on cost-free basis to DPL at its plant site for conversion of the same into BF-grade metallurgical coke, including all undersize coke fractions. DPL will supply the entire quantity of BF coke as well as undersize coke fractions thus converted to designated SAIL plants by rail. The SAIL Operations Directorate will also ensure a buffer stock of coking coal required for production of around 10 days at DPL.

DSP will pay a lump sum conversion fee of Rs. 1,950/- per tonne of gross coke on dry basis to DPL. The statutory taxes, duties and other charges wherever applicable shall be paid by DSP. Freight charges would also be made by Durgapur Steel Plant.

DSP, which has been on a new production high since last year, requires higher quantities of metcoke for its blast furnaces to meet its increased production plan for the current year. The plant’s existing coke making capacity cannot take care of the extra demand. This agreement would be help the plant to achieve well over 2 million tonnes of hot metal in the current year, a feat not yet achieved since inception.

In the meantime, the plant, which made a net profit of Rs. 81 crore in 2003-04 after over two decades, has already crossed the figure in Q1 of the current year itself. Onto a major drive to enhance production capability to 3 million tonnes by the year 2012, DSP has embarked on a plan to improve production and productivity parameters by going in for 100% production of crude steel through the continuous casting route. The first steps towards this has already been taken with the order placement for a Bloom Caster of 0.85 million tonnes per annum capacity on a consortium led by Daneili Centro of Italy. The total project will cost around Rs. 271 crore. The Bloom Caster will come along with a ladle furnace and a reheating furnace.

In the upstream side, DSP will be reviving and upgrading its Blast Furnace No. 1 to enhance hot metal production to about 3.5 million tonnes. Facilities for tar injection in Blast Furnace No. 2 and coal dust injection in Blast Furnaces 3 & 4 are likely to be in place in the next year or so. DSP also plans to install a bar & rod making capacity of 1.4 million tonnes and a medium structural mill of 0.4 million tonnes capacity besides putting up another billet caster in the near future to provide the continuous casting route to the enhanced crude steel production. The plant also plans to invest in revamping its Merchant Mill, augmentation of raw material handling, modification of the existing billet caster and balancing facilities for BOF during the period. An Oxygen Plant of 500 TPD capacity on BOO basis is also envisaged to meet the enhanced oxygen demand.

With the above investments and addition of the various facilities the plant would enhance its finished component to 2.63 million tonnes out of the total projected saleable steel production of 2.835 million tonnes.

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