Mumbai: AM/NS India, a joint venture between ArcelorMittal and Japan's Nippon Steel, plans to enhance capacity at the erstwhile Essar Steel pellet plant at Paradip, Odisha to 6 million tonnes per annum (mtpa), with room to expand it by 3-6 mtpa.

Expanding capacity has topped the agenda of the management since the takeover of the plant in December from Essar Steel following bankruptcy proceedings.

In a presentation to investors on Thursday, ArcelorMittal, the majority partner in the joint venture, said the company plans to expand its total pellet-making capacity to 20 mtpa, including an 8-mtpa Vishakapatnam plant, by 2021-22.

Following the capacity expansion, about 30% of the pellets produced can be exported, since captive consumption would only require about 70% of installed capacity.

In December, after taking control of the steel plant, the new management had said it would ramp up steel-making capacity at the plant to 12-15 mtpa from the current 9.6 mtpa.

ArcelorMittal also said India is a low-cost market for steel-making, compared with ASEAN and China, and anti-dumping duties imposed by the government would protect the domestic industry from unfair trade.

ArcelorMittal’s total equity contribution to the AM/NS venture stands at $1.6 billion.

ArcelorMittal reported a net loss of $2.5 billion for the October-December quarter, and ending the year with net debt of $9.3 billion.

Lakshmi N. Mittal, ArcelorMittal chairman and CEO, in a statement said 2019 was a very tough year for the company.

“However, our cash generation remained strong helping to reduce net debt to the lowest ever level. This demonstrates the contribution of our Action2020 programme which was designed to ensure ArcelorMittal can be cash flow positive through all aspects of the steel cycle. We expect to make further deleveraging progress this year."

Predicting a reversal in the global steel downturn, Mittal said “Although market conditions remain challenging, there are encouraging early signs of improvement, particularly in our core markets of US, Europe and Brazil. With inventory levels having reached a very low level following a period of de-stocking, we are seeing customers return to the market, supporting an improved pricing environment."

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