Indian govt to invest Rs 1.5 lakh cr to set up steel plants in 4 states

2 February 2015

The government plans to invest Rs 1.5 lakh crore to set up four new steel plants in collaboration with four state government. The plants will have a combined capacity of 20-24 million tonne, steel minister Narendra Singh Tomar said.

“We have decided to set up four steel plants in Odisha, Jharkhand, Chhattisgarh and Karnataka of 5-6 million tonne each. Each project will be implemented via separate SPVs and the respective state government will partner in the projects,” Tomar said.

He added that to implement each project, two SPVs will be formed — one for mining and the other for steelmaking — and the mining SPV would be dedicated for supplying iron ore to the steelmaking unit. “Based on investment of Rs 6,000 crore for each million tonne of steel and associated cost for mining, the total investment will be in excess of Rs 1,50,000 crore. I have already held discussions with states and got a positive response from Chhattisgarh and Odisha. I shall shortly talk with the Karnataka and Jharkhand governments,” Tomar said.

According to the minister, the plan for new capacity has been made to boost the Make in India focus and take steel capacity of the country to 300 million tonne by 2025 from 80 odd million tonne at present.

According to the plan, central PSUs including SAIL will invest in Chhattisgarh, Rastriya Ispat Nigam in Odisha and NMDC in Jharkhand and Karnataka along with the respective state governments.

Tomar said while the plan was to boost steel capacity, reforms and transparency in the mining sector is necessary to create a conducive environment for steelmaking.

All mines would be auctioned to create transparency and with the Mining and Minerals Development Regulation Amendment Ordinance, mineral producing states will have no additional power to stop interstate mineral movement. “Whoever gets a mine via the auction route will have absolute right on it. States cannot put any additional condition above the regulation of the ordinance,” Tomar said, adding that this will help non-iron-ore producing states in attracting investment in the steel sector.

Tomar, who was here to review SAIL’s expanded facility (from 2.1 mt to 4.5 mt), said PM Narendra Modi will inaugurate the expanded facility.

SAIL chairman CS Verma has said the company is in expansion mode keeping in mind Modi’s ‘Make in India’ motto. By 2025-30, SAIL’s capacity will get enhanced to 50 million tonne at an investment of Rs 1,50,000 crore.