SAIL to soon take call on setting up steel plant in MP

State-run SAIL will soon take a call on setting up its second integrated steel plant in Madhya Pradesh at an estimated investment of Rs 20,000 crore.

The proposed new facility, if found economically viable in an ongoing feasibility study, could be set up at Chhatarpur area which has abundant low-grade iron ore, an official source said. SAIL already has a manufacturing base in Bhilai.

The proposal for setting up a greenfield steel plant was mooted by Madhya Pradesh Chief Minister Shivraj Singh Chauhan at a recent meeting here in which Steel and Mines Minister Narendra Singh Tomar and SAIL Chairman C S Verma were also present. Madhya Pradesh is home state of Tomar.

A decision on capacity of the proposed plant and technology to be used would be taken after approval of the detailed project report (DPR) by the board of Maharatna firm, the source said.

When contacted, the SAIL chairman said, "Chattapur area of Madhya Pradesh has iron ore deposits. We have applied for five mining leases in the area. We expect the Madhya Pradesh government to accord the approval soon.

"Depending on the quality of iron ore and financial viability, we may set up value-added units like beneficiation and pelletisation plant in due course of time."

About the proposed steel plant, he said he would comment only after the detailed project report was prepared.

Industry sources said to ensure economic viability of a steel plant that uses iron ore as raw material, the minimum size should be 3 mtpa with an investment of around Rs 20,000 crore along with beneficiation and pelletisation units.

By the next fiscal, SAIL's Rs 70,000 crore modernisation and expansion programme would be over raising its capacity to 24 mtpa. Post-2016, it will embark on another expansion programme for raising capacity further to 50 mtpa by 2025 with around Rs 1.5 lakh crore outlay.