**Executive Summary**
This document addresses Unstarred Question No. 1789 regarding the status of pellet plant projects and related matters within the Ministry of Steel. The response covers the approvals, cancellations, financial liabilities, Coal Dust Injection (CDI) usage, and blast furnace operations at Gua, Dalli, and Rourkela. The answer was provided on 10.02.2026.
**Key Points / Main Content**
* **Gua Pellet Plant Project:**
* Initially approved in 2010, contract awarded in 2014.
* Project cancelled in 2019 due to lack of Forest Clearance.
* Proposal reprocessed under the Build-Own-Operate (BOO) model.
* **Dalli Mines Pellet Plant Project:**
* Proposal initiated in 2021, awarded in 2022.
* Plant operational since September, 2025, under the BOO model.
* **Rourkela Steel Plant Pellet Plant:**
* Approved in October 2021 on a Cost-Ownership-Management (COM) basis.
* Contract awarded in February, 2025.
* **Financial Liability:**
* No financial liability has arisen on account of the pellet plant projects at Rourkela Steel Plant and Dalli Mines.
* The contractor has raised a claim in respect of the cancelled Gua Pellet Plant contract, which is presently sub judice.
* **Coal Dust Injection (CDI):**
* CDI usage is dependent on the design and operating parameters of individual blast furnaces.
* SAIL has progressively improved CDI performance, achieving 106 kg/thm across plants in 2024.
* **Blast Furnace Operations:**
* Blast furnace operation is a continuous and regular process.
* Annual production plans are finalised prior to the commencement of the financial year.
**Impact Analysis**
**Ministry of Steel / Government of India**
* **Impact:** The Ministry is responsible for overseeing and managing pellet plant projects, ensuring compliance with regulations, and addressing financial liabilities.
* **Action Required:** Continue to monitor the progress of pellet plant projects, resolve the claim related to the cancelled Gua Pellet Plant contract, and support SAIL in optimizing Coal Dust Injection usage.
**Contractors / Pellet Plant Operators**
* **Impact:** Affected by project approvals, cancellations, and contract terms. They face potential financial risks and delays related to project execution.
* **Action Required:** Comply with contract terms, manage project execution within approved timelines, and resolve any disputes through legal channels.
**SAIL (Steel Authority of India Limited)**
* **Impact:** SAIL is impacted by the performance of CDI and blast furnace operations.
* **Action Required:** Maintain and improve CDI performance and incorporate maintenance requirements, market conditions, and business plans into the annual production planning.
Key Entities Referenced
Ministry of Steel: Indian government ministry responsible for steel industry.
Gua Pellet Plant: Pellet plant project in Gua, Jharkhand, India. The initial project faced cancellation due to Forest Clearance issues and was reprocessed under a Build-Own-Operate model.
Dalli Mines: Location of a pellet plant project under the BOO model.
Rourkela Steel Plant: Location of a pellet plant project approved on a Cost-Ownership-Management (COM) basis.
Coal Dust Injection (CDI): Technique used in steel plants to improve blast furnace performance.
GOVERNMENT OF INDIA
MINISTRY OF STEEL
LOK SABHA
UNSTARRED QUESTION NO. 1789
FOR ANSWER ON 10.02.2026
PELLET PLANT PROJECTS
1789. DR. KIRSAN NAMDEO:
Will the Minister of STEEL be pleased to state:
(a) the status of approvals, cancellations, retendering and mode changes for pellet
plants at Gua, Dalli and Rourkela since their first approval, year-wise;
(b) the total financial liability, including arbitration awards, interest payments and
opportunity costs, arising from delays and contract failures in pellet plant projects;
(c) the shortfall in Coal Dust Injection (CDI) against norms during 2017-24, plant-wise;
and
(d) the blast furnace-wise details of unplanned shutdown hours and excess capital
repair hours during 2017-24?
ANSWER
THE MINISTER OF STATE IN THE (SHRI BHUPATHIRAJU SRINIVASA VARMA)
MINISTRY OF STEEL
(a)&(b): The Gua Pellet Plant project was initially approved in 2010 and the contract
was awarded in 2014. However, the project could not be taken forward due to non-
receipt of the requisite Forest Clearance (FC), and consequently, the contract was
cancelled in 2019. Subsequently, the proposal has been reprocessed under the Build-
Own-Operate (BOO) model.
The proposal for setting up a pellet plant at Dalli Mines under the BOO model
was initiated in 2021, awarded in 2022, and the plant has been operational since
September, 2025.
The pellet plant at Rourkela Steel Plant was approved in October, 2021 on a
Cost-Ownership-Management (COM) basis and the contract has been awarded in
February, 2025.
No financial liability has arisen on account of the pellet plant projects at
Rourkela Steel Plant and Dalli Mines. However, the contractor has raised a claim in
respect of the cancelled Gua Pellet Plant contract, which is presently sub judice.
(c)&(d): The usage of Coal Dust Injection (CDI) in steel plants is dependent on the
design characteristics and operating parameters of individual blast furnaces. In recent
years, SAIL has undertaken progressive improvements in CDI performance, achieving
an average level of 106 kg per tonne of hot metal (kg/thm) across its plants in 2024.
Operation of blast furnaces is a continuous and regular process and is integral
to the overall functioning of an integrated steel plant. Annual production plans of steel
plants are finalised prior to the commencement of the financial year, taking into
account maintenance requirements, prevailing market conditions and the overall
business plan of the company.
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