State-owned miner NMDC plans to set up a 139-km-long slurry pipeline to carry iron ore from Bailadila mines for its proposed 3 million tonnes per annum steel plant in Nagarnar, with an estimated cost of Rs 800 crore, a top company official has said.

Both Bailadila mines and the Nagarnar steel plant are located in Chhattisgarh.

The official said civil work of the project will start once the necessary permissions are granted by different agencies and will be completed before December 2016, when the steel plant is expected to commence production.

“In order to reduce dependence on railways (for iron ore transportation to its plant), NMDC intends to develop slurry pipeline transportation system from Bailadila to Nagarnar as an alternate mode for transportation of iron ore fines in slurry form, subsequent to its conversion to iron ore concentrate suitable for making pellet feed concentrate,” the official told PTI.

Due to safety reasons, the slurry pipeline will be laid besides the National Highways or State Highways or district roads to get the maximum extent feasible.

This will enable ease of laying and access for monitoring and maintenance, the official added.

The Bailadila sector is served by Kothavalasa-Kirandul (K-K) railway line of East Coast Railways which will not be in a position to evacuate the total produce from the Bailadila sector in the present state, the official said.

“Though there is a proposal for doubling the K-K railway line after which the capacity will go up by another 12-MTPA... there will be a wide gap between the existing evacuation capacity in Bailadila sector and quantity of the finished product of 65 MTPA envisaged subsequent to opening of new mines of Dep-13 and Dep-4,” the official added.

Earlier, state-owned steel firms — KIOCL, NMDC and RINL — had reportedly decided to set up 13 million tonnes per annum slurry pipeline between Nagarnar and Vizag for carrying iron ore with Rs 3,500 crore investment.

They have already inked an MoU for setting up a joint venture in which Kudremukh Iron Ore Company (KIOCL) will hold 48 per cent stake, while NMDC and steel-maker Rashtriya Ispat Nigam Ltd will hold 26 per cent each.

The slurry pipeline will be used to transport iron ore fines from NMDC’s Bailadila mine in Chhattisgarh to Vizag in Andhra Pradesh, where RINL has its lone steel-making facility.

In 2012, NMDC had signed a MoU with RINL for developing a slurry pipeline of about 450 km from Jagdalpur to Visakhapatnam and 3-4 mtpa pellet plant at Visakhapatnam.