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Jindal Steel and Power (JSPL) plans to enhance the steel-making capacity at its Raigarh plant in Chhattisgarh by 7 million tonnes per annum (mtpa) in two phases at an estimated cost of Rs 24,000 crore.
Work on the expansion, however, can resume only after it gets the issue of plant location sorted out with the Chhattisgarh government.
"Raigarh is our first plant and we have 3 mtpa steel making capacity there at present. We plan to increase the plant capacity by 7 mtpa in two phases in which a total of Rs 24,000 crore investment will be required," company's Deputy Managing Director and CEO-Steel Business V R Sharma told PTI.
In the first phase, it intends to expand the plant capacity by 4 mtpa with Rs 15,000 crore investment and by 3 mtpa in the second phase with Rs 9,000 crore outlay, he said, adding that the first phase is expected to be completed within three years after the commencement of work.
Sharma said the required investment in the proposed expansion would be less compared to a greenfield plant as all the necessary infrastructure is already in place.
Sharma said though JSPL has requested the state government to allow the proposed capacity expansion at the existing location of its steel plant, the state has been insisting on setting up a new plant at a separate location keeping in mind the need for development of other parts of the state.
"We have already applied to the Chhattisgarh government to allow us to expand capacity of our Raigarh plant by seven mtpa. The state, however, is asking us to go to a different location as they want to develop some other area strategically and economically," he said.
"We have said that since we have an existing facility, the land is available in nearby area, all other infrastructure viz. railway, water and everything - is in place, it would be cost-effective for us to expand through the brownfield route. We are still discussing," Sharma added.
Meanwhile, JSPL is separately planning to invest Rs 23,000 crore in next three years to increase its overall steel making capacity to 14 mtpa from the current three mtpa (at Raigarh). The company hopes to raise Rs 12,000 crore debt to part-fund the investment, while the rest would be funded from internal accruals.
Of the proposed Rs 23,000 crore investment, about Rs 14,000 crore would be invested on JSPL's upcoming 6 million tonne (MT) steel plant at Angul.
Besides, JSPL will be utilising about Rs 9,000 crore for its other greenfield venture, having 3 mt capacity, in Jharkhand's Patratu and on expanding its Oman plant by another 2 mt, Sharma said.
The company has set an ambitious growth plan to have 20 mtpa steel making capacity by 2020 and has been on a buying spree in recent times to secure raw material linkages for its upcoming plants.
Sharma said the company is also planning to invest about Rs 2,000 crore to set up two pellet plants in Barbil and Angul with a cumulative capacity of 11.5 mtpa.
"We already have 4 mtpa pellet capacity at Barbil in Odisha. Work on a 4.5 mtpa plant involving Rs 750 crore investment is likely to be completed by September this year.
"We will also set up a pellet plant at Angul with Rs 1,200 crore outlay. This plant is likely to go on stream by 2016," he said.
