ArcelorMittal Nippon Steel India Ltd (AM/NS India) has secured the right to pay ₹451 crore to mechanize and operate the CQ-III berth at the state-owned Paradip Port for 30 years, processing 10 million tonnes (mt) of dry bulk cargo on a captive basis. In order to secure the contract, ArcelorMittal Nippon Steel India Ltd, a joint venture between two of the leading steel producers in the world, agreed to split ₹62.20 per metric tonne of cargo handled at the berth. This is crucial for transporting goods into and out of its pellet plant, which is located next to the port on the east coast. The contract was finalised through the ‘Policy for award of waterfront and associated land to port dependent industries in major ports’.
For $2.05 billion (about ₹16,500 crore), AM/NS India purchased some port, electricity, and other logistics and infrastructure assets from the Essar Group in 2022. These assets were essential to the steel factory at Hazira, which it had purchased under India’s bankruptcy law. The agreement included a deepwater jetty at Paradip Port in Odisha with a dedicated conveyor that handles pellet shipments from AM/NS India’s Paradip pellet plant, a 25 mt captive port and a 270 MW power plant at Hazira, next to AM/NS India’s flagship steel plant, and a 16 mt deep draft terminal at Visakhapatnam Port with an integrated conveyor connected to AM/NS India’s 8 mt iron ore pellet plant in the port city. The deal also included a 515 MW gas-based power plant, along with allied land that can be utilised for AM/NS India’s expansion plans at Hazira.
The company’s manufacturing and logistics chain will be more strategically integrated thanks to the assets, which are either owned by or affiliated with AM/NS India’s steelmaking. They will also guarantee smooth connectivity and supply chain security for the movement of raw materials and completed goods between the steel maker’s manufacturing facilities in western, eastern, and southern India, as well as for exports.
AM/NS India will be able to realise further synergies from rising throughput at the port assets because of the company’s planned expansion of steel production capacity. The CQ-III berth was originally awarded to Essar Ports for a period of 15 years but came into the fold of AM/NS India in 2022 post acquisition. The tenure of the contract ended recently, and Paradip Port Authority had called bids on the public-private-partnership (PPP) model using the captive policy.
The port authority had set a royalty reserve price of Rs54 per metric ton for the project, which was the winning royalty quoted by Jindal Steel & Power Ltd to build a 25-million tonne (mt) capacity, deep draft, dry bulk cargo handling terminal at the Western Dock of Paradip Port. This was the last royalty price discovered by the port authority for a PPP project at the port and hence used as the reserve price for the captive berth tender.
