Ispat plans Rs 2k cr facilities to cut costs
The Pramod & Vinod Mittal-led Ispat Industries (IIL) is setting up a 1 million tonne a year pellet plant and a coke oven of similar capacity that will help reduce costs.
By Prince Mathews Thomas, TNN |
MUMBAI: The Pramod & Vinod Mittal-led Ispat Industries (IIL) is setting up a 1 million tonne a year pellet plant and a coke oven of similar capacity that will help reduce costs. The two projects entail an investment of Rs 2,000 crore, said sources.
The pellet plant will come up near Vishakapatnam in Andhra Pradesh. “The plant will be near the Bailadila mines in Chhattisgarh, so it will make sense logistically and save transport costs,” said sources. At present, Ispat Industries sources iron ore lumps from state mining agency NMDC, which operates the mines in Chhattisgarh.
The pellets will be later supplied to the company’s manufacturing capacity based at Dolvi in Maharashtra. It currently uses about a million tonne of pellets in its 3.5 million tonne per annum (mtpa) facility.
Pellets are being increasingly used in the production of direct reduced iron, a steel making technology that is used by IIL. The company’s stock was up 0.71% at Rs 13.9 on the BSE on Wednesday.
The 1 million tonne coke oven at Dolvi will also help the company meet its coke needs, which at present is being imported from China. “While the pellet plant will be set up within 2 years, the coke oven should come up in 18 months,” said sources. Coke is used in blast furnaces for the conversion of iron ore into iron.
However, it’s unclear how the company would finance the projects. Sources said the company is looking at ‘various options’. The steel company, which has debts of Rs 6,500 crore, is believed to be planning to raise $500 million through bonds in the overseas market.
The money will fund capacity expansion at Dolvi. It recently signed an MoU with the Mahrashtra government to expand capacity from the present 3.5 mtpa to 5.4 mtpa.
IIL is also setting up a 600-mw coal-based power generation plant in Chhattisgarh. The power plant, scheduled to commence production in 2011, will come up in the Janjgir-Champa district of Chhattisgarh at an estimated cost of Rs 2,500 crore.
About 300 mw would be used for captive purposes. IIL is also setting up a 2.6 mtpa steel capacity in Jharkhand with an investment of Rs 6,750 crore. The capacity will be eventually enhanced to 5 mtpa, the company said.
prince.thomas@timesgroup.com
The pellet plant will come up near Vishakapatnam in Andhra Pradesh. “The plant will be near the Bailadila mines in Chhattisgarh, so it will make sense logistically and save transport costs,” said sources. At present, Ispat Industries sources iron ore lumps from state mining agency NMDC, which operates the mines in Chhattisgarh.
The pellets will be later supplied to the company’s manufacturing capacity based at Dolvi in Maharashtra. It currently uses about a million tonne of pellets in its 3.5 million tonne per annum (mtpa) facility.
Pellets are being increasingly used in the production of direct reduced iron, a steel making technology that is used by IIL. The company’s stock was up 0.71% at Rs 13.9 on the BSE on Wednesday.
The 1 million tonne coke oven at Dolvi will also help the company meet its coke needs, which at present is being imported from China. “While the pellet plant will be set up within 2 years, the coke oven should come up in 18 months,” said sources. Coke is used in blast furnaces for the conversion of iron ore into iron.
However, it’s unclear how the company would finance the projects. Sources said the company is looking at ‘various options’. The steel company, which has debts of Rs 6,500 crore, is believed to be planning to raise $500 million through bonds in the overseas market.
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The money will fund capacity expansion at Dolvi. It recently signed an MoU with the Mahrashtra government to expand capacity from the present 3.5 mtpa to 5.4 mtpa.
IIL is also setting up a 600-mw coal-based power generation plant in Chhattisgarh. The power plant, scheduled to commence production in 2011, will come up in the Janjgir-Champa district of Chhattisgarh at an estimated cost of Rs 2,500 crore.
About 300 mw would be used for captive purposes. IIL is also setting up a 2.6 mtpa steel capacity in Jharkhand with an investment of Rs 6,750 crore. The capacity will be eventually enhanced to 5 mtpa, the company said.
prince.thomas@timesgroup.com
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