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Government to pump in Rs 1.5 lakh crore in four new steel plants

Steel Minister Narendra Singh Tomar said the plan for new capacity has been envisaged to boost 'Made in India' and take the steel capacity of India to 300 mn tonnes.

twitter-logoPTI | February 2, 2015 | Updated 12:31 IST
Centre to invest Rs 1.5 lakh cr to build 4 new steel plants
Photo: Reuters

The Centre on Sunday said it will pump Rs 1,50,000 crore for building four new steel plants of 20-24 million tonnes combined capacity in collaboration with the governments in four states.

"We have decided to build four new steel plants and four dedicated mining companies to feed these plants in four states partnering the respective state governments. We aim for six million tonnes capacity for each plant," Union Steel and Mines Minister Narendra Singh Tomar said in Rourkela on the sidelines of an expansion review meeting.

Based on investment of Rs 6,000 crore for each million tonne of steel and associated cost for mining, the total investment will be in excess of Rs 1,50,000 crore.

"We have decided to form SPVs for each plant and mining companies. We are already holding discussion with state governments. I had positive discussion with the Chattisgarh and Odisha and shortly we will talk with Karnataka and Jharkhand governments," Tomar said.

He said the plan for new capacity has been envisaged to boost 'Made in India' focus and take the steel capacity of the country to 300 million tonnes by 2025 from 80 odd tonnes.

As per the plan, SAIL will invest in Chattisgarh, Rastriya Inspat Nigam in Odisha, NMDC in Jharkhand and Karnataka.

SAIL Chairman C S Verma said the details of SPVs are yet to be worked out but for each project, two SPVs will be floated, one for mining and another for plant.

Tomar was confident that new reforms and transparency in mining sector will help the steel sector come out of the current crisis.

He said all mines will now will be auctioned for sake of transparency.

Now, with Mining and Minerals Development Regulation Amendment Ordinance, now mineral producing states will have no additional power to stop inter-state mineral movement, Tomar said.

This will help states like West Bengal in attracting steel plants that do not have iron-ore.

Presently, states impose restriction on inter-state movement of minerals to retain investment in their own states.

The minister was evasive about the POSCO project and also Khandadhar mining issue.

Replying to a question, the minister said, "The mines issue would be taken care under the new ordinance." However, when he was reminded that his ministerial colleague Jual Oram was against it, Tomar parried the question.

He also sidestepped a question on whether POSCO's proposed production is part of the centre's target of 300 MTPA by 2010.

Regarding a medical college to be built at Rourkela, the minister said, "SAIL is not in a position to manage a college because this is altogether a different activity. However, under CSR if the state government approaches SAIL, it will be considered."

When he was reminded about the declaration made by Prime Minister Narendra Modi here during his election campaign, he said, "Who can deny what the PM had declared."

"I believe the workers and other should get a good super specialty medical facility and we will see what SAIL can do about this."

Regarding the proposed cement plant at Purunapani which will use the slag from blast furnaces, Verma said, "Yes there was a proposal and nothing has moved in this direction. We will put this in the BoD meeting and see what can be done."

Regarding the Bisra Stone and Lime (BSL) at Biramitrapur the minister said, "Once the ordinance is implemented it will clear the roads for the revival of the company."

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