Rs 31,800-crore steel projects in pipeline

Indian and multinational companies are announcing fresh investments in the metals sector at a breakneck pace. Eleven Indian and multinational metal companies have already lined up investments of $69.9 billion (Rs 31,800 crore) in greenfield and brownfield projects.

These projects are to be implemented in the next four to six years and are likely to increase the capacity of the steel industry by a whopping 103 million tonnes.

The foreign direct investments in steel sector would come from Mittal Steel, which has planned to invest $8.7 billion while Posco would invest $11.3 billion and Vedanta $2.7 billion.

The Indian companies, which have proposed to invest are Tata Steel ($16.7 billion), Jindal Vijayanagar Steel ($11.6 billion), Jindal Steel & Power ($5.3 billion), Ispat Industries ($3.3 billion), Bhushan Steel ($2 billion) and Rashtriya Ispat Nigam ($1.9 billion).

The major steel capacity built-up announcement and proposals have come from Tata Steel (25 million tonnes), Jindal Vijayanagar (22 million tonnes), Mittal Steel (12 million tonnes), Jindal Steel & Power (11 million tonnes), Posco (12 million tonnes), Vedanta (5 million tonnes), Essar Steel (4 million tonnes) and others (12 million tonnes).

Mittal Steel, JSW Steel (Jindal Vijayanagar), Posco, Tata Steel, Jindal Steel & Power, Vedanta, Essar Steel and Ispat Industries have announced greenfield steel projects to add a capacity of total 73.33 million tonnes at an investment of $43.4 billion (Rs 19,750 crore).

Ispat Industries, Bhushan Steel and Tata Steel are currently implementing their 6.5 million tonnes expansion programme at a cost of $4.1 billion (Rs 1,866 crore).

Hindalco has proposed a million-tonne alumina refinery and 2.60 lakh tonnes of alumina smelter in Orissa at a capital outlay of $2.4 million. The company has already announced a 3.25 lakh tonne greenfield alumina smelter project with a capital outlay of $ 1.7 million.

Orissa and Jharkhand with natural advantages, such as the availability of iron ore, bauxite and coal, account for 74 per cent of new metals sector projects being initiated in India.

A research done by the Centre for Monitoring Indian Economy (CMIE) and Morgan Stanley Research shows that Orissa and Jharkhand, two of the richest states in India in terms of minerals resources, have been the favourite destinations for investors.

Orissa accounts for 40 per cent of India's reserves for bauxite, 27 per cent of iron ore and 97 per cent of chromite.