Sesa Goa plans Rs 30,000 cr foray into steel

Vedanta Group firm Sesa Goa is planning an investment of over Rs 30,000 crore in the steel space in Orissa and Jharkhand and may rope in a global company to jointly run the ventures, the company said today.

"We have written to the Orissa government for transferring an MoU signed with Vedanta group firm Sterlite Industries to our name as anything in iron ore and steel space in the group will have to be undertaken by Sesa Goa. The MoU is for a 5 million-tonne plant in Orissa".

"Similarly, we are looking to complete land acquisition for a 1-1.5 million tonnes steel plant in Jharkhand by the end of this fiscal. For steel plants, we will enter into technical collaboration," Sesa Goa Managing Director P K Mukherjee told PTI.

He, however, did not give a time frame within which the company planned to start the venture.

The estimated investment in the Orissa project could be Rs 25,000 crore while the Jharkhand venture could cost up to Rs 7,500 crore, he said.

Earlier this month, Vedanta Chairman Anil Agarwal had said that the group would partner a "strong" steel company as and when it decided to foray into manufacturing of this commodity.

Mukherjee said such partnership was relevant as "We are iron ore mining company. We don't have expertise in steel making. We will go for technical partnership in steel making."

Sesa Goa manufactures pig iron at its facility in Goa. The country's third largest iron ore exporter is augmenting its annual production capacity of pig iron from the present 2.50 lakh tonnes to 6.25 lakh tonnes.

Besides, Sesa Goa has also planned to double its iron ore production capacity to 50 million tonnes by 2012.

With delays in getting regulatory processes for allocation of captive iron ore mines, companies mainly the global ones, are looking at forging alliances with domestic firms to run steel plants.

Foreign companies like Posco are finding it tough to set up their independent plants in the country and are in the process of setting up such unit in joint venture with state- owned SAIL.

Similarly, ArcelorMittal has partnered domestic steel firm Uttam Galva to mark its first operational presence in India. ArcelorMittal estimated Rs 1 lakh crore India steel projects has been delayed for over five years now.

Recently, JFE Steel of Japan agreed to purchase nearly 15 per cent stake in domestic steelmaker JSW Steel, thereby taking its first step to tap in growing steel demand in India. Vedanta's proposal for a joint venture in steel making could attract more global steel makers to India.