At present, India is dependent on other countries and imports about 9 million tonnes a year of vehicle scrap for recycling into high-value autograde products.
"We have plans to set up a used vehicles shredding plant to cater to raw material needs of the automobile industry, which is dependent on imports from US, UK and other nations. We have sought permission from the Ministry of Finance for a 80 tonne per hour capacity plant with an initial investment of Rs 120 crore," MSTC Chairman S K Tripathi told PTI.
The plant is likely to come up in Gujarat.
"Once we get necessary approvals from the Ministry of Finance and other departments and shredding material starts pouring in, we can start the plant within one year," he said.
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Shredding plants are there in almost all advanced and developing nations like the US, UK, China and Singapore and going by rough estimates there could be 4 to 5 million tonnes end of live vehicles per annum, Tripathi said.
Last week, Steel Minister Beni Prasad Verma had said that MSTC has proposed a plant for shredding the used cars, scooters and other miscellaneous goods to add value to recycled scrap.
The existing un-organised method of processing of metal scrap results in lesser recovery rate as compared to international standards and is not consistent with international pollution and environmental norms, he added.
In India the demand for steel is driven by the automobile and the construction industry and the secondary steel producers use shreddable scrap for production of steel by the Electric Arc Furnace method or the Induction Furnace method.