State-run Steel Authority of India (SAIL) will set up a 3-million tonne per annum (MPTA) plant in Central Kalimantan province, Indonesia, with a likely investment of up to Rs 15,000 crore. It will also set up a mineral processing facility, a source privy to the development said.
The timeline for the plant will be decided soon, the source added.
Going by the thumb rule of an investment of Rs 4,000-5,000 crore for 1-million tonne production capacity, the project is likely to see an investment of up to Rs 15,000 crore.
SAIL had already inked a pact with the Indonesian government on January 25 for setting up a steel plant and a mineral processing unit, besides the development of mineral deposits in Indonesia's Central Kalimantan province. The memorandum of understanding (MoU) was signed by SAIL Chairman C S Verma and the governor of Central Kalimantan, Agustin Teras Narang, in the presence of Indonesian President Susilo Bambang Yudhoyono.
The MoU envisages setting up a steel plant and a mineral processing facility by the optimisation of Central Kalimantan's large natural resources such as coking and thermal coal, iron ore and other minerals.
This is expected to contribute to the economic development of the province and meeting the coal requirements of International Coal Venture Ltd's (ICVL) promoter companies through mutual partnerships. ICVL is a consortium of five state-run companies — SAIL, Coal India, NMDC, RINL and NTPC. Verma is the chairman of the group.
While the Indonesian province will provide ICVL with necessary maps and licences, ICVL will undertake the preliminary survey and exploration activities to decide on the location and suitability of the quality of minerals and the size of reserves, both for use in Indonesia, as well as for exports.
“The MoU marks the beginning of our mutual intent for long-term engagement with each other in the area of economic cooperation between both the institutions,” Verma said.
