The board of Tata Steel Ltd on Wednesday cleared a series of expansion initiatives as part of its long-term India growth strategy.
In a statement, the steelmaker said it received the board's nod for a 4.8-million-tonne-per-annum (mtpa) capacity expansion at Neelachal Ispat Nigam Ltd, and that this would help the company further expand into long products.
Additionally, to meet the needs of the automotive industry, it will set up a 0.7 mtpa hot-rolling pickling and galvanizing line in Tarapur, Maharashtra. A third expansion is planned at Meeramandali to expand in flat steel production, where the company will add a 2.5 mtpa thin-slab caster and rolling facility. It has a target of 40 mtpa capacity by 2030.
Raw materials
In a move to secure raw materials, the company has signed a memorandum of understanding with Lloyds Metals & Energy to explore mining opportunities in Maharashtra for increasing production of iron ore, a key raw material. It will acquire a 50.01% stake in Thriveni Pellets Pvt. Ltd (TPPL). Pellets are small, hardened balls made of iron ore and used in steel production.
“The expiry of captive mines in FY2030, according to the MMDR Act would significantly increase Tata’s raw material costs from FY2031,” said analysts at Kotak Institutional Securities in a note dated 8 December.
With Lloyds, Tata Steel said it will explore an opportunity for the development of a greenfield 6-million-tonne steel capacity in two phases. Tata Steel meets 100% of its iron ore requirements from captive mines.
The board also approved setting up of a 1 mtpa demonstration plant in Jamshedpur that will use lower-grade ore, eliminate coke and incorporate steel slag. The steelmaker will start engineering work and regulatory processes for the plant.
Recent joint trials with a global steelmaker have progressed well, the company said. The steelmaker has been testing its low-carbon HIsarna technology, a process that uses lower-grade ore, eliminates coke, and incorporates steel slag, making it a more sustainable steelmaking method at its pilot plant in IJmuiden, Netherlands for a decade.
On Wednesday, Tata Steel shares closed 0.8% higher at ₹162 on the National Stock Exchange, while the benchmark Nifty ended 0.3% lower.
