ArcelorMittal Nippon Steel buys Essar’s ore handling terminal in Vizag Port

ArcelorMittal Nippon Steel India Ltd (AM/NS India) will be a 16mn iron terminal related to the Hazira Steelworks it acquired under Indian Bankruptcy Law.

Essar Vizag Terminals Ltd (EVTL), a wholly owned unit of Essar Ports Ltd (EPL), acquired the Iron Ore Handling Complex at Visakhapatnam Port, previously operated by the State Ports Authority, as part of a government privatization programme.

Essar Vizag Terminals secured the 30-year deal in an auction by placing the highest revenue share of 31.05 percent with the Port Authority.

“The Visakhapatnam Port Authority Board has approved the proposal submitted by Essar Vizag Terminals to sell the facility to AM/NS India, subject to security clearance by the
central government,” said an official with the Visakhapatnam Port Authority. The center’s security clearance is mandatory for private freight contracts and mergers and acquisitions in major or Union government-operated ports.

“Security clearance for the deal is expected within a month,” the official said. “As soon as it comes, we will issue a clearance certificate for the transaction,” he added.

Essar Vizag Terminals took over Visakhapatnam Port’s Ore Handling Complex in May 2015 by making an upfront payment of Rs.1.85 crore to the Port Authority. In addition, it is contractually obliged to pay an annual revenue share of 31.05 percent to the port authority.

The terminal includes three berths (two outer port berths and one inner port berth) with a total capacity of 23 mt.

After taking over the terminal, Essar has invested approximately Rs800 crores to upgrade the outer harbor berths (OB I & II) and mechanize the inner harbor berths (WQ-I).

The mechanized facility at the terminal includes car dumpers for receiving cargo with rakes, transferring cargo via a conveyor system to the stockyard with multiple stackers and reclaimers, and loading onto ships by ship loaders.

The terminal can accommodate super-cape size vessels and has a dedicated rail link to the Bacheli and Kirandal mines, giving it the advantage of serving the western sector of India. It is also integrated with AM/NS India’s 8 million iron ore pellet plant at Vizag via a fully mechanized conveyor system with a 6.7 km conveyor belt system.

“The pellet plant at Vizag is entirely dependent on the iron ore handling complex at the port for the transportation of the pellets to the Hazira Steel Plant,” said the Visakhapatnam Port Authority official.

The terminal is strategically located in the Bay of Bengal in close proximity to the iron ore mines at Chhattisgarh, Southern Odisha and Jharkhand.

The facility has a dedicated rail link to India’s iron ore mining belt.

The all-weather deep drawing line has the capacity to serve the fast growing markets of Southeast Asia including China, Japan and Korea in addition to coastal transport for the steel industry in India.

In 2022, AN/NS India acquired some port, energy and other logistics and infrastructure assets from Essar Group for US$2.05 billion (about Rs.16,500).

The deal included a 25mt owned port along with a 270MW power plant at Hazira and a 12mt owned berth at Paradip Port.

The assets are either proprietary or linked to AM/NS India steelmaking and will strengthen the strategic integration of the company’s manufacturing and logistics chain, providing seamless connectivity and supply chain security for the movement of raw materials and finished goods between the steelmaker’s western manufacturing facilities, East and South India and for export, AM/NS said announcing the deal.

AM/NS India will continue to realize synergies from increasing throughput at the port facilities due to the planned expansion of the company’s steel production capacity, it added.

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