Monnet Ispat to set up Rs 200-cr iron unit in MP

The sponge iron unit will be put up at the proposed SEZ in Gwalior

Monnet Ispat Ltd has proposed to set up a Rs 200-crore sponge iron unit in Madhya Pradesh. The company is reportedly in talks with the Madhya Pradesh government to give shape to its plan, which is almost finalised.

A source told Business Standard, "The company has decided to set up a sponge iron unit at the proposed special economic zone in Gwalior. The company has also found a local partner in the venture. The investment may go up further by another Rs 30-50 crore."

The company was in an expansion mode and the Gwalior plan was part of the expansion, said sources. But company officials could not be contacted for confirmation of reports. Monnet already has a plant in Raipur with a 300,000-tonne capacity.

With the recent closure of more than 100 sponge iron units in Chhattisgarh, the iron and steel prices have shot up in Madhya Pradesh too. The high cost of power in both the states, coupled with cess and electricity duties, keep investors away from the sector.

"Madhya Pradesh cannot provide cheaper power to the industry due to huge power outage. So, special economic zones are the only options left in the state, as the power is comparatively cheaper in SEZs. But Monnet will have to set up its captive power plant."

The slow process of privatisation of SEZs is another hurdle for investors. The Indore special economic zone is yet to be privatised, despite the fact that the state government's consultant Tata Consultancy Economic Services (TCES) had shortlisted the bidders some six months back.

Iron resolve

The investment may go up by another Rs 30-50 cr

Monnet Ispat has a plant in Raipur as well with 300,000-tonnes capacity

Closure of many sponge iron units in Chhattisgarh has pushed iron, steel prices in MP

High cost of power, cess and electricity duties in MP make investment in SEZ, where power is cheaper, an attractive option