The recent decision of the Supreme Court capping iron ore production at 30 million tonnes per annum in Karnataka has not deterred iron and steel companies from expanding their capacities. Both the existing and new steel companies have lined up expansion plans as well as set up greenfield plants in the ore-starved Karnataka state.
While newcomers like Arcelor Mittal and Posco are still awaiting allotment of captive mining leases before commencing work on their respective six million tonne per annum greenfield steel plants in the state, existing manufacturers like JSW Steel Ltd, BMM Ispat Ltd and Kalyani Steel have planned expansion.
During the recent Global Investors’ Meet (GIM 2012) organised by the state government as many as eight companies had signed MoUs to make a combined investment of Rs 91,782 crore in the iron and steel sector in the state. These are NMDC, JSW Steel Ltd, JSW Projects Ltd, BMM Ispat, Mukand Ltd, Zeenath Transport Company, Tata Steel Ltd and Kalyani Steels.
BMM Ispat, the second largest steel producer in Karnataka, has proposed to set up a 3-million tonne per annum natural gas-based steel plant and a 440-Mw gas-based captive-cum-merchant power plant. “We are setting up a 1.3 mtpa beneficiation plant along with blast furnace, coke oven and sinter plants with an output of 2 mtpa. We have tied up with a consortium of banks led by State Bank of India for a loan of Rs 4,200 crore for this project,” an official spokesperson of BMM Ispat said.
He said the company had already received an approval from the State High Level Clearance Committee for its project and would approach the Ministry of Environment and Forests (MoEF) once the Supreme Court settles all mining issues. BMM requires about 4.8 million tonne iron ore to meet its expansion plans. It already procures about 4 million tonne per annum for its existing plants.