Tata Steel drops plan for Gopalpur plant

Raw material concerns limit the company's Gopalpur ferrochrome hub capacity to 55,000 tpa

Tata Steel has dropped plans to set up a ferrochrome complex at Gopalpur in Odisha but will build a plant with a capacity of 55,000 tonnes at the same place.

This unit is scheduled for commissioning by the first week of September.

Tata Steel’s decision to scrap the project was influenced by concerns over raw material supplies beyond 2020, when the company’s lease of the Sukinda chromite mine in Jajpur district ends.

According to the changed Mines and Mineral Development and Regulation Act, this mine will be put up for auction after 2020. Uncertainty over the mining rights made setting up a large ferrochrome capacity a risky proposition for Tata Steel, a source said. The company has gone ahead with the smaller plant because it is being promoted as an anchor investment for Tata Steel’s Gopalpur industrial park.

Besides, work on the plant had begun before Tata Steel last year failed to have the status of the Sukinda mine changed from merchant to captive. The changed status would have allowed the company to retain the deposits till 2030.

Both ferrochrome plants at Gopalpur were showcased by Tata Steel to build its case for the change of status of the Sukinda mine.

Besides the units at Gopalpur, Tata Steel has two ferrochrome plants in Odisha, one at Bamnipal of 65,000 tonnes and the other at Athgarh of 55,000 tonnes, which are also likely to be hit by raw material uncertainty after 2020.

Work on the 55,000 tonne plant at Gopalpur, built at a cost of Rs 542 crore, is nearing completion and the unit is slated for commissioning shortly.

“The construction of the plant is complete. Work on power connectivity is on. We may commission the plant by the first week of next month,” said Arun Mishra, vice-president, Tata Steel.  

The unit is housed in Gopalpur Industrial Park. Tata Steel had acquired 2,970 acres of land in the area for setting up a steel plant in 1996, but it decided instead to set up an industrial park and special economic zone.