BackSAIL aims to invest ₹5,500 cr in FY24
SAIL plans to invest ₹5,500 crore this fiscal year to expand capacity, part of its ₹1 trillion de-bottlenecking efforts.
PremiumNew Delhi: Steel Authority of India Ltd (SAIL) is planning to invest ₹5,500 crore during this fiscal year to expand capacity, Amarendu Prakash, chairman, SAIL, said.
“Last year, it was at ₹8,000 crore. Since current expenditure includes sustenance projects and de-bottling projects, it will be the same level as previous years, about ₹5,500 crores or so," he said on the sidelines of a conference.
The move by India’s largest steel manufacturer is part of its ₹1 trillion investments towards de-bottlenecking efforts, aiming to boost its annual capacity from the existing 20.6 million tonnes (mt) to 35mt by 2031-32.
“Proposed scale of indicative investment by SAIL to reach annual capacity of around 35mt of crude steel by 2030-31 will be around ₹1,10,000 crore," the government said in a statement in August 2022.
The ₹5,500 crore is part of the ₹11,000 crore the company plans to spend on augmenting existing facilities. The steel major is also seeking to double its capacity at Benga coal mine, Mozambique, from the existing 2mt to 4mt, through debt. “Capital exploration and sourcing capital is always a strategic decision for a company. So, ICVL (International Coal Ventures Pvt. Ltd ) will be looking for capital as we fix our plans. There are some plans to raise debt," Prakash said. “And SAIL would rather depend on sourcing coal requirements via the company’s capital mines," he added.
Benga coal mine is owned by ICVL, a SAIL joint venture with Rashtriya Ispat Nigam Ltd, NMDC Ltd, Coal India Ltd and NTPC Ltd for acquiring overseas coal mines and other assets.
Steel producers are expressing concerns about surging coking coal prices, driven by the closure of a few mines in Australia. This coincides with efforts by Indian companies to stockpile coal to meet the post-monsoon rise in demand. SAIL is working to secure 300,000 tonnes of coal through Russian imports, for the second time this year.
Market insights shared by consultancy firm SteelMint on its website showed Australian premium hard coking coal prices as of 30 September stood at $333 per tonne FOB (free on board) and at $349 per tonne CNF (cost, no insurance, and freight) increasing 3% over the previous week due to growing buyer interests, amid limited supplies. So, import of cheaper coal from Russia will help provide cushion to the steel major.
Milestone Alert!Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.
