Government-owned Steel Authority of India Ltd (SAIL) is planning to invest Rs 70,000 crore in the next two to three years to expand its hot metal capacity to 23.46 million tonnes per annum (mtpa) from 13.8 mtpa at present, to meet increasing demand from the infrastructure sector.
“The investment includes modernisation and expansion of iron ore mining capacity. But the success of this expansion would depend on availability of iron ore from captive sources,” C S Verma, chairman, told Business Standard.
The Union ministry of environment and forests has granted SAIL approval for the Budhaburu lease of the Chiria iron ore mine. Clearances for Sukri-Latur and Dhobil leases of Chiria are in advanced stages of approval.
“This has also strengthened our position. New mine development is being taken up on the fast track,” he said.
SAIL has engaged Hatch Associates of Australia, a consultant of global repute, for preparation of a Detailed Project Report for the mine. “Initially, a mechanised mine with state-of-the-art technology will be developed to produce seven mtpa in the first phase and 15 mtpa in the second phase,” Verma added.
“To meet the increased iron ore requirement after expansion, the existing mines will be expanded to its maximum potential. Gua and Bolani mines will be expanded to 10 mtpa. We are also continuously trying to identify new areas to reduce dependence on imported coal and trying to augment indigenous coking coal availability,” he said.
The company is also aggressively looking out for allocation of thermal coal blocks. SAIL is also in talks with the governments of Mongolia and Indonesia for setting up steel projects.
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It is part of International Coal Ventures Ltd, a special purpose vehicle set up by the government.
“We are aggressively pursuing equity participation with existing leading coal mining companies. Due diligence of some coal assets is in progress and we hope to finalise these very shortly,” said Verma.
It is planning a new mill at Bokaro, a rail mill in Bhilai, a plate mill and medium sized mill at Durgapur, a bar and rod mill in Bhilai and a wire rod and bar mill at Burnpur.
“As part of our expansion plan, two new blast furnaces, will be functioning at Rourkela and Burnpur, which will increase inherent capacity to 19.5 mt from the present 14 mt by the end of current financial year. Another new blast furnace will be coming during 2012-13,” he added.