Kolkata: To ensure long-term security of critical raw materials, the Steel Authority of India Ltd (SAIL), which has undertaken a Rs 40,000 crore capacity expansion plan, has proposed to form a JV with Manganese Ore India Ltd (MOIL), besides picking up stake in a special-purpose vehicle (SPV) to be floated for acquisition of coal mines abroad.
The proposed joint venture with MOIL, also a unit under the Steel Ministry, would produce ferro-manganese and ferro silicon with installation of three furnaces at Bhilai and a total proposed capital outlay of Rs225 crore, SAIL chairman S K Roongta said.
He said SAIL will pick up stake in a proposed SPV to be floated by five PSUs, the o ther four being Rashtriya Ispat Nigam Ltd, Coal India Ltd, National Thermal Power Corporation Ltd and National Mineral Development Corporation for acquisition of coal mines abroad.
While he did not give details of the SPV, reports said the five PSUs would put in an equity component of Rs 4,000 crore in the proposed SPV and the company would contribute Rs 1,000 as equity.
Roongta said that besides the Rs 40,000 crore capacity expansion programme, SAIL has decided to set up a greenfield plant with a capacity of 6 mt at Jharkhand in lieu of renewal of leases of iron ore mines at Chiria, which have a reserve of two billion tonnes.
SAIL has already communicated its decision to the Jharkhand government, which wanted value-addition to iron ore sourced from the state.
SAIL has currently undertaken a programme to ramp up capacity to 23 mt by 2010, he said.
On 14 March, SAIL had announced its decision to set up a 6 million-tonne greenfield steel plant in Jharkhand costing around Rs 18,000 crore.
The project was in lieu of renewal of the mining lease for the Chiria mines, Roongta said. Chiria mines is considered to have the finest iron-ore desposit in the country.
The company is likely to finish the current fiscal selling 14.5 million tonne. SAIL will add two million tonnes of hot metal to its capacity by fiscal 2007-08.