Jindal Steel plans Rs 2600 cr expansion

The Naveen Jindal-controlled Jindal Steel & Power (JSPL) has announced Rs 2,600 crore brownfield expansion at its Raigarh unit in Chhattisgarh.

The company has signed a memorandum of understanding (MoU) with the government of Chattisgarh for this project.

JSPL's expansion plan includes a clean-type coke oven, 2.5 million tonne sinter plant, blast furnace, steel melting shop, one million tonne plate mill and a 0.7 million tonne rolling mill for manufacturing rebars, TMT, wire rods and a 100 mw power plant.

The company has planned a 1.5:1 debt equity ratio for this project. Sushil Maroo, wholetime director, finance, JSPL, said: "The company will raise debt for this project "" a mix of external commercial borrowings up to $100 million and rupee debt. The funds will be raised over a period of three years."

JSPL plans to complete the project over the next three years. "We have already placed orders for equipment," Maroo said. The company is also in talks with the Chattisgarh government for coal and iron ore linkages for this project.

"Although we have our iron ore mine in Orissa, we are looking for coal and iron ore mines in Chattisgarh to support this expansion," Maroo said.

The company is currently undergoing an expansion programme to 1.3 million tonne of sponge iron making facilities. This project along with increase in steel meting capacity to 1.1 million tonne per annum, is scheduled to be completed by March 2005.

JSPL has recently signed a memorandum of understanding with the Orissa government for setting up a one million tonne greenfield steel making plant.