Maharatna SAIL today said it plans to spend Rs 1,000 crore for capacity expansion of its arm -- ferro-alloy producer MEL --in a bid to ensure raw-material security to its steel plants.
The plans include installing two new furnaces at Maharashtra Elektrosmelt Ltd (MEL) at a cost of Rs 500 crore besides setting up two 45 MW power plants there entailing a similar investment, Steel Authority of India Ltd (SAIL) said.
"MEL, the only subsidiary of SAIL, has been advised ... to draw up an expansion plan with the objective of ensuring fulfilment of 100 per cent requirement of ferro-alloys of SAIL's integrated steel plants which are currently in capacity expansion mode," a company statement said.
The statement comes in the wake of SAIL Chairman C S Verma's visit to MEL, in Chandrapur, Maharashtra, which is India's largest manganese-based ferro-alloys producer with a product-mix that includes carbon ferro-manganese (FeMn) and silico-manganese (SiMn).
The process of the MEL's merger with SAIL is in its final stages, Verma pointed out and assured the firm that "funds for expansion of MEL would not be a constraint, with SAIL extending full support."
"Higher ferro-alloy production by MEL would go a long way in meeting the raw material security concerns of SAIL," it said adding, two new 45 MVA furnaces will be installed there not only to cater to the post-expansion requirements of the SAIL plants, but also of other steel plants.
SAIL chairman also asked MEL to explore possibilities of setting up facilities to produce ferro-nickel for the SAIL plants.
SAIL is in the process of expanding its capacity to 23.46 million tonnes per annum (MTPA) by 2012-13 from 14.35 MTPA at present entailing an investment of Rs 70,000 crore.
Post-expansion, requirement of ferro-alloys by the SAIL plants would be to the tune of 3,75,000 tonnes.