Steel Authority of India Ltd (SAIL) plans to invest close to Rs3,000 crore in its proposed joint venture with Kobe Steel of Japan for the revival of the Jagdishpur unit of the erstwhile Malvika Steel which the public sector company acquired in 2009.
Steel Authority of India Ltd (SAIL) plans to invest close to Rs3,000 crore in its proposed joint venture with Kobe Steel of Japan for the revival of the Jagdishpur unit of the erstwhile Malvika Steel which the public sector company acquired in 2009.
The joint venture with Kobe would be formalised after SAIL takes a view on the detailed project report expected in the next two months, chairman CS Verma said on Friday. “We plan to have speciality and auto grade steel at Jagdishpur. I think in two months we would be in a position to finalise the DPR and take a view on signing the joint venture with Kobe.”
The project involves setting up sponge iron making facility, electric arc furnace and downstream products such as speciality and auto-grade steel.
Verma expects to receive feedback from Hatch Associates of Australia, a consultant earlier appointed by SAIL for preparing a detailed project execution report for the development of Chiria, Asia’s largest single-location iron ore mines with an estimated reserve of two billion tonnes of high-grade iron ore,in 3-4 months.
“Our plan is to reach an annual ore production of five million tonne (mt) a year within the next three years and then eventually scale it up to 15 mt,” said Verma.
Development of Chiria would help SAIL meet some of its annual iron ore requirement, which is expected to almost double to 42 mt from the present 24 mt by 2012-13 as the company expands steel production to 21.40 mt by that time, Verma said.
For securing supplies of another key input, coking coal, SAIL, along with its multi-member consortium, International Coal Ventures Ltd, hopes to conclude a deal this fiscal to access mines in Indonesia.
“We were given choices of 3-4 mines in Indonesia and we have done due-diligence of them and in this fiscal itself we would be in a position to secure at least 1-2 coking coal assets,” Verma, who also heads ICVL, said.
ICVL started looking at Indonesia following signing of an MoU between SAIL, ICVL and the Indonesian government which envisaged development of mines and steel capacity at the Central Kalimantan region of that country.
SAIL, meanwhile, is in the process of preparing the master plan for its research and development activities and the blueprint would be finalised and submitted to the government by September. “The plan is being drawn up by a renowned metallurgist from the US,” Verma said.
SAIL plans to invest about Rs15,000 crore in capex this fiscal, which will involve commissioning a 3 mt plant at Burnpur in West Bengal.
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