Essar Steel to set up Rs 17,760-crore plant

The Ruias-promoted Essar Steel has said it would set up a 6-MTPA steel unit in Karnataka at an investment of Rs 17,760 crore as it looks to prop up its annual capacity to 25 million tonnes by 2015.

"Our investment proposal (for the steel plant) has been cleared by the Karnataka government," an Essar Steel spokesperson said. The plant is to be set up at Bagalkot in the state.

Initially, the plant would have a 3 MTPA capacity, which would be doubled to 6 MTPA in the second phase, sources said.

The proposal is to set up a pellet plant, a coke oven plant and a battery in the first phase for which the company has asked the state government to lease an iron ore mine for uninterrupted supply of the raw material.

At present, Essar Steel's produce stands at 4.6 MTPA at Hazira in Gujarat and plans to increase the capacity to 9 MTPA. Its Indian operations also include an 8 MTPA benefication plant at Bailadilla in Chattisgarh and an 8 MTPA pellet complex in Visakhapatanam in Andhra Pradesh.

The company is also working on putting up a 6 MTPA integrated steel plant at Paradeep in Orissa. The project would be developed in two phases.

In addition to its Indian operations, Essar Steel has a presence in Canada, the US and Indonesia. Essar Steel Algoma has a 4 MTPA capacity. PT Essar Indonesia, the second largest producer of cold-rolled steel in the private sector in the country, has a rolling capacity of 400,000 tonnes per annum.

Minnesota Steel, which Essar acquired in 2007, plans to set up a 2.5 MTPA integrated steel plant with an estimated cost of $1.65 billion.

Already the fifth largest steel producer in the world, India in its National Steel Policy has envisaged production of the alloy to reach to 110 MTPA by 2019-20.

However, based on the assessment of ongoing projects, the Ministry of Steel has projected that the country's steel capacity is likely to be 124.06 MTPA by 2011-12.

As per the status of MoUs of private producers with various state governments, India's steel capacity would be nearly 293 MTPA by 2020.