JSW Steel hopes to start work on 12 mt Paradip steel plant in FY19

Sajjan Jindal-led JSW Steel is looking at the possibility of starting project activity in the next fiscal on its 12 million tonnes mega steel plant proposed near Paradip in Odisha.

The steelmaker has committed an investment of Rs 550 billion on the integrated steel mill, 900 Mw captive power plant, 32 million tonnes pellet unit, a captive port and a slurry pipeline to transport iron ore concentrate from Joda to the project site proposed near Paradip.

"JSW Steel can start work on the ground after they get land from the Odisha government. The government is processing the land requirement and we believe the identified land can be transferred to the company soon", said an Odisha government official.

JSW Steel officials did not respond to queries sent by Business Standard. A questionnaire mailed to the company remained unanswered.

The 12 million tonnes steel unit by JSW Steel is to come upon 2700 acres land. It is the same land parcel alienated for the South Korean multi-national Posco that proposed a 12 million tonnes mega steel plant at an investment of $12 billion. Out of 2700 acres land acquired by Odisha Industrial Infrastructure Development Corporation (Idco), 1700 acres was transferred to Posco. But, since Posco offered to surrender the land, it was taken back by the government.

JSW Steel has formed a wholly owned subsidiary — JSW Utkal Steel Ltd to fast-track the implementation of its 12 million tonne crude steel plant and other inter-linked projects in Odisha. While the port-based steel plant was initially proposed to be developed by JSW Steel, another group company JSW Infrastructure got the clearance to build the slurry pipeline.

JSW Steel has requested the state government to transfer all clearances and approvals to JSW Utkal Steel Ltd. The steel firm has submitted the annual reports, annual returns, Articles of Association and board resolution of both the companies. The papers are being vetted by the state government officials.

JSW Steel had originally proposed to set up a 10 mtpa capacity shore-based steel plant in Odisha. It had asked for 4,500 acres of land for the steel mill. Later, the company has submitted a revised project plan, intending to go for a higher capacity steel project.

With the reconfiguration in its proposed project expected to be accompanied by the latest technology, JSW Steel is likely to settle for a smaller land parcel measuring 2700 acres. The Odisha government is set to hand over the same land acquired originally for a 12 mtpa steel project proposed by Posco. JSW Steel had sought the same land which the state-owned Odisha Industrial Infrastructure Development Corporation (Idco) procured from betel vine growers and other farmers. The steel firm had asked for transfer of all land parcels at the rate of Rs 400,000 per acre.

For optimising raw material costs, JSW Steel has committed an investment of Rs 37 billion on a slurry pipeline for transporting 30 million tonnes of iron ore each year from Joda to Paradip. Both the projects have been approved by the High-Level Clearance Authority (HLCA), the highest body to clear investments.

Moreover, to secure iron ore supplies for its integrated steel project, the company has pitched for a long-term agreement for 50 years with state-owned Odisha Mining Corporation (OMC) to supply 30 million tonnes per annum of iron ore fines at IBM (Indian Bureau of Mines) declared price.