New Delhi: UK-based Stemcor and domestic steel major Ispat Industries have entered into a joint venture (JV) to set up a coke oven plant at the latter’s unit near Mumbai at an investment of Rs900 crore.
“Stemcor will hold 76% stake and Ispat will hold 24%. The project will cater 100% captive metcoke requirement of Ispat on a cost plus basis,” investment banking sources told PTI.
“The JV Amba River Coke Company will have an equity of around Rs300 crore and a debt funding of Rs600 crore” sources said, adding “Stemcor has already given the mandate to leading banks in India for syndicating the debt.”
The JV will also have a back-to-back agreement for long- term sourcing of coking coal from Australia.
The coke oven battery’s capacity will have the provision to be scaled up to 1.5 million tonnes per annum. It will also generate captive power for Ispat’s Dolvi integrated steel plant from the coke oven gas. The plant would generate about 150 Megawatts of power.
It is already commissioning 110 MW blast furnace gas-based power plant which will also be completed by the end of next year.
Ispat is one of the largest importer of metcoke from China. Chinese metcoke prices are highly volatile and in the current year prices have increased from $200 per tonne to $450 per tonne.
The captive coke oven will save around $200 per tonne of coke, sources said. Stemcor is Ispat’s international steel trading partner also. Coking coal contract prices, which is around $100, is being negotiated internationally between Australian coal suppliers and Japanese steel mills for an increase of around 30% next year.