The group has formed a new company, Aaress Iron and Steel Limited (AISL), to implement this project. AISL is raising a debt of about Rs 3,000 crore from financial institutions, while the balance Rs 1,700 crore will be brought in by the promoters, according to Rahul Baldota, Director.
The plant will be ready by end 2009. AISL has acquired 1,036 acres at Halavarty and Basapura villages of Koppal district at a cost of Rs 70 crore from Karnataka Industrial Area Development Board (KIADB). The steel plant will be set up in three phases of which the present investment is for phase one. The company is looking to import coking coal from either Indonesia or Australia.
The pellet plant of 1.2 MTPA capacity is being set up by the group's flagship company MSPL at an investment of Rs 200 crore. The company has already contracted with Sinosteel MECC, China, for supply of technology and equipment. It will sell its production domestically, mainly to automobile companies, Baldota said. The company is also setting up a captive power plant of 70 MW capacity, which will be subsequently enhanced to 340 MW.
Narendra Kumar A Baldota, CMD, MSPL Limited said, "AISL launch is in tune with the increasing demand for the production of steel globally and in India. There is a projected demand for about 200 million metric tonnes per annum by 2020 as per the National Steel Policy. Our project will help fasten the development of this backward district of Karnataka."
The steel and pellet plants are expected to create direct employment opportunities to 1,400 people and indirect employment to many more.