Mitsui plans 5m tonne steel plant in Orissa

Mitsui & Co, the $6 billion Japanese conglomerate, is keen to set up a five million tonne steel plant in Orissa.

"We are now exploring the possibilities and gathering information on the prospects of putting up a steel plant here before coming out with a concrete proposal", said Takao Miyachi, chairman, Mitsui & Co India Pvt Ltd.

He said, the most significant aspect of the proposed venture is that for the first time in the country, it will use the latest technology developed by an associate company of Mitsui, which uses non-coking coal for production of steel.

This technology will not only help the venture to overcome the crisis faced by many steel industry due to short-supply of coking coal, but also is very cost effective.

Miyachi was here to take part in the Mineral East symposium on "building eastern India as a global hub in minerals and metals" organised by the Confederation of Indian Industry (CII).

Mitsui already owns a chunk of mining lease in Orissa through its Indian subsidiary Sesa Goa Ltd (in which the Japanese company has 51 per cent stake) at Thakurani sector in Keonjhar district.

Though Miyachi did not specify the cost of the project saying it is still in an exploratory stage, he hinted that the cost could be less than the present industry standard of Rs 2,000 crore per tonne of steel because of the use of new technologies.

Striking a cautious note, Miyachi said, Mitsui does not want to join the current rush by various domestic and international steel majors to set up steel projects in Orissa. "We will wait and watch and ascertain the atmosphere here before making our move", he said.

Besides, steel industry being cyclic in nature, we have to see there is enough demand for the product when the new project comes up, he added.

However, globally one of the key business areas of Mitsui is iron and steel product and raw material trading business. The expansion of capacities and volume of business has a priority of place in the company's goal of attaining 100 billion yen income mark by 2006.

Among other international players, BHP Billiton is also planning a Rs 7,000 crore investment in the state for mining and production of steel among other things. South Korean steel giant Posco is also in talks with the Orissa government to setup a 3 million tonne plant in Orissa.

Non ferrous metals major Vedanta Resources "" holding company of Sterlite Industries has also lined up a Rs 12,500 crore investment to set up a 5 million tonne steel plant in the state, along with development of iron ore mines.

Meanwhile, Tata Steel, the country's largest private sector steel company has also announced a plan to setup a 6 million tonne steel plant in Orissa. The company has envisaged an investment of around Rs 15,000 crore for this project.

Earlier last week, four Indian companies signed a memoranda of understanding with the Orissa government for setting up sponge iron and mild steel plants in the state.