State attracts Rs 1 lakh crore investment proposals in steel

New proposals, if realised, would add close to 28 MTPA steel capacity in state

Mahesh Kulkarni / Chennai/ Bangalore Jun 13, 2012,
Business Standard
The temporary ban on iron ore mining and cap on extraction of ore to 30 million tonnes by the Supreme Court in Karnataka has not deterred the iron and steel industry from investing in the state. At the just-concluded Global Investors’ Meet (GIM 2012) in Bangalore, the state government has managed to attract fresh investment proposals worth over Rs 1 lakh crore to the steel sector.

Top steel producers like JSW Steel, Tata Steel and largest mining firm NMDC are among some one dozen companies that have signed memoranda of understanding or expressions of interest to set up steel plants in Karnataka. These proposals, if realised, would add close to 28 million tonnes of steel and allied products manufacturing capacity in the state. Presently, Karnataka contributes 30 per cent or 16.5 million tonnes of national steel output.

However, unlike in GIM 2010 when the iron and steel sector accounted for 66 per cent of the investment proposals, the sector accounts for just about 15 per cent of the total investment proposls signed at GIM 2012. The state signed MoUs or EoIs for a total of Rs 7.6 lakh crore on June 7 and June 8.

The prominent among the MoUs in the steel sector were that of the NMDC for Rs 25,000 crore to set up a steel plant, a power plant and a pellet plant at a location yet to be decided. Tata Steel Ltd has proposed to enhance the capacity of its proposed integrated steel plant at Haveri from 3 million tonne per annum to 6 million tonne per annum at an investment of Rs 20,000 crore. BMM Ispat has proposed to set up a gas-based steel plant with a capacity of 3 MTPA at Dhanapura village in Bellary district at an investment of Rs 16,230 crore.

Kalyani Steels Ltd has signed two MoUs for setting up a 3 MTPA plant to produce carbon and alloy steels, reinforcement bars and structured steel for an investment of Rs 7,500 crore in Koppal district and another plant to manufacture carbon, alloy and stainless steels among others at a cost of Rs 12,000 crore in Yadgir district.

JSW Steel Ltd, which already operates India’s largest single location steel plant with a 10 MTPA capacity, has proposed to invest Rs 4,190 crore to manufacture cold rolled annealed and skin passed coils with 1.9 MTPA capacity at its plant in Toranagal in Bellary district. JSW Projects Limited has proposed to invest Rs 2,400 crore to set up 1.20 MTPA DRI (Direct Reduced Iron) plant, 3.42 MTPA Coke Dry Quenching (CDQ) plant and 70 Mw captive power plant at Toranagal in Bellary district.

Mukand Ltd has proposed to set up a 700,000 tonnes per annum integrated steel plant at a cost of Rs 2,892 crore in Koppal district. Zeenath Transport Company, an exporter of iron ore, has proposed to set up 1.2 MTPA iron ore beneficiation plant, 1.2 MTPA pellet plant, and 500,000 tonnes per annum integrated steel plant with 140 Mw power plants in Bellary district.

Reliance Cement Company Pvt Ltd has proposed to set up a 2 MTPA cement plant at an investment of Rs 2,000 crore in Bagalkot district.

Meanwhile, the Karnataka government has urged the Supreme Court to rework the cap on iron ore mining and fix the ceiling at 40 million tonnes per annum as against 30 million tonnes recommended by the CEC.