Hy-grade Pellets Ltd, a joint venture corporation of Essar group and Stemcor, a steel trading group based in the United Kingdom, is all set to start the construction of India's longest slurry pipeline this month.

HGPL has planned to transport iron ore fines in slurry form from Bailadilla mines to Visakhapatnam through this proposed pipeline.

HGPL owns and operates 3.3 million tonnes per annum capacity iron ore pellet plant at Visakhapatnam.

This plant exported around Rs 301 crore (Rs 3.01 billion) worth of pellets during the last three years. To reduce transport expenditure and production cost, HGPL has proposed this pipeline.

The 267-km-long pipeline with a 8 million-tonne transporting capacity will transport iron ore in slurry form from Bailadilla mines in Chattisgarh state to Visakhapatnam, replacing the present rail movement.

The company hopes to save transportation costs of Rs 300 per tonne on completion of the project, HGPL managing director K V Rao said.

On completion of the project, HGPL will emerge as one of the world's lowest cost producers of high quality iron ore pellets, he said.

Recently a contract for construction of slurry pipeline was signed between the HGPL and OAO Stroytransgaz's consortium with Essar constructions.

Stroytransgaz is one of the biggest Russian construction corporations and world's major pipeline specialist companies. 

The project cost is estimated to be Rs 300 crore (Rs 3 billion). In 18 months, the pipeline laying work will be completed, Rao said.

The 267-km slurry pipeline will travel through Chhattisgarh, Orissa and Andhra Pradesh and it will cross about 62 km of forest area, five major rivers, three major railway crossings and four major national highway crossings.

HGPL is also will take up a beneficiation plant at the mine head at Bailadilla alongside the pipeline project.