New Delhi: Rashtriya Ispat Nigam (RINL) will sign a pact with iron ore miner NMDC for a joint venture that aims to set up a 336-km slurry pipeline and a pellet plant with an investment of Rs 2,200 crore.

"The two state-run firms will sign an MoU in the presence of steel minister Beni Prasad Verma on Thursday.

"As per the agreement, the two will form a joint venture, which will set up the pipeline for transporting fines in the form of slurry from NMDC's Bailadila mine to RINL's Vizag facility where the pellet plant will be located," a source in the know of the development said.

Total investment in the pipeline and the pellet facility will be around Rs 2,200 crore, which will be shared between the two companies depending upon the shareholding structure of the venture, he added.

"All the modalities regarding the shareholding and the investment of the joint venture will be worked out later. It will be done in due course," the source said.

The source said the pipeline will pass through national highways keeping in mind the insurgence problem in the entire stretch and to avoid an Essar like situation.

Ruias-promoted Essar Steel recently said it was considering to reroute its 267-km slurry pipeline from Kirandul in Chhattisgarh to Vizag in Andhra Pradesh in order to avoid disruption.

Fines are to be pumped through slurry pipeline to RINL's Visakhapatnam facility to convert them into pellets. Pellets are key raw materials for sponge iron, which is an essential ingredient for steel making.

The transportation of fines in the form of slurry would reduce RINL's dependence on rail. The usage of pellets would also help the company in improving productivity of the blast furnace. It would also reduce its coke consumption.

The two companies have been discussing the matter for long and on June, 2010, the two decided to join hands for working out modalities, land requirement and equity participation to set up the joint venture.

(Agencies)

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