Bhushan Steel has informally approached the West Bengal Industrial Development Corporation (WBIDC) for an additional 1,000 acres in West Bengal, in the wake of negotiations with Sumitomo Metal Industries (SMI) for participation in its steel project.
Sources close to the development said, “We had sought 2,500 acres for our project initially. That was for two million tonnes. To take it to six million tonnes, we will need another 1,000 acres. We have informally told WBIDC about it, they said it will not be a problem.”
Bhushan Steel signed a memorandum of understanding (MoU) with the West Bengal government in May 2007 for a two million tonne steel plant with a captive power plant of 1,000MW and a 0.5 million tonne cold rolled and galvanising plant for automobile grade steel.
The steel plant with power project would come up in Bardhaman district and cold rolling and galvanising plant would be set up in the North 24 Parganas.
State government sources indicated that if the project was altered then Bhushan would have to sign a fresh MoU.
Bhushan was in discussions with SMI for participation in the Bengal project. If talks with SMI fructified then the project would be scaled up to six million tonnes and the investment was likely to be in the region of Rs 15,000 crore, significantly higher than the earlier investment plan of Rs 8,000 crore.
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For Bengal, it would be the second largest project after JSW Steel’s 10 million tonne plant at Salboni in West Medinipur, which has projected a total investment of Rs 35,000 crore.
Sources said meetings with SMI on the project were scheduled for the end of the month. However, Sumitomo has said in a statement released recently that it had been considering various business opportunities in India and other countries, but had not entered into specific negotiation or reached any decision. Sumitomo is a technical partner in Bhushan Steel’s Orissa project.