ArcelorMittal to get nod to acquire Essar iron terminal

Essar Group was awarded the Iron Ore Handling Complex and other facilities for mechanisation to make it world-class so as to increase iron ore handling capacity manifold in May, 2015. As per the 30-year duration concession agreement, Essar Group had agreed for paying a revenue share of 31%

Visakhapatnam: The decks are being cleared for the acquisition of the state-of-the art iron ore terminal here from Essar Group by ArcelorMittal Nippon Steel India (AM/NS India) at an estimated cost of Rs 800-1,000 crore.

“Though the deal was finalised long ago, there was some delay due to various clearances. Now security clearance is expected anytime,” Durgesh Dubey, Deputy Chairman of Visakhapatnam Port Authority (VPA) told Bizz Buzz on Monday.

AM/NS is a joint venture of ArcelorMittal SA and its affiliates and Japan’s Nippon Steel Corporation. The deal is considered one of the largest post-pandemic mergers and acquisitions in India. Earlier, Essar Group had struck a deal with AM/NS for selling some of its port, power and transmission infrastructure for an estimated Rs 19,000 crore.

The Competition Commission of India (CCI) last year September accorded clearance for acquisition of the Essar’s infrastructure like Essar Power Hazira Ltd, Gandhar Hazira Transmission Ltd, Hazira Cargo Terminals Ltd, Ibrox Aviation & Trading Pvt Ltd, Essar Bulk Terminals Ltd, Essar Bulk Terminals Paradip Ltd and EVTL in Visakhapatnam. The deal also included Snow White Agencies Pvt Ltd and Bhagwat Steel Ltd.

Essar Vizag Terminal Limited (EVTL), a wholly owned unit of Essar Ports Ltd (EPL) is the concessionaire of an all-weather, deep-water terminal under VPA as part of its privatisation policy. Essar Group was awarded the Iron Ore Handling Complex and other facilities for mechanisation to make it world-class so as to increase iron ore handling capacity manifold in May, 2015.As per the 30-year duration concession agreement, Essar Group had agreed for paying a revenue share of 31.05 per cent. The terminal has two berths in the outer harbour and one in the inner harbour (OB1 and 2 and West Quay1) with a combined capacity of 24 million tonnes.

AM/NS India also owns an eight million tonne per annum capacity pellet plant in the city, which used to be supplied to Essar Hazira Steel Plant. EVTL is considered the largest iron ore handling complex with a totally mechanised environment in the country. The terminal is strategically located in the Bay of Bengal in close proximity to iron ore reserves in Chhattisgarh, Southern Odisha and Jharkhand. The concession agreement was awarded to Essar on a Build-Operate-Transfer (BOT) basis as the project proponent wanted to diversify its customer profile at the time of global bidding. Once upgraded the mechanised system was envisaged initially to reach a capacity of 8,000 TPH (tonnes per hour), the highest in any major port in India.