| Rashtriya Ispat Nigam chairman B. K. Panda in Calcutta on Sunday. Picture by Kishor Roy Chowdhury
Calcutta, April 27: Rashtriya Ispat Nigam (RINL), the second-largest profit making steel company in the country, has embarked on a massive brown-field (expansion) project to raise capacity from three million tonnes to 10 million tonnes at an investment of Rs 17,600 crore. This is the largest-ever steel sector expansion.
Company chairman B. K. Panda told reporters here today that the plan would be completed over three phases in 2019-20. Its board will meet shortly to finalise the roadmap to be submitted to the government for approval.
The Rs 2,600 crore required for the first phase of the plan, in which capacity will be raised to 4.7 million tonnes over three years, will come from internal accruals. The amount covers the cost of a sinter plant (Rs 300 crore), two converters (Rs 600 crore), billet casters (Rs 300 crore), rolling mills (Rs 800 crore) and an oxygen plant (Rs 600 crore).
The second phase will cost Rs 6,500 crore, taking the capacity to 6.8 million tonnes in the year ending March 2012. The final phase, which will give the plant the ability to produce up to 10 million tonnes, will take Rs 8,500 crore.
Once the project is over, the company that only makes long steel products will set up facilities for flat items, Panda said.
The public sector steel major’s chairman pointed out that the string of gas finds on the east coast has opened a new cost-reducing option. Gas is a substitute for coke in steel making.
“We are already in talks with Reliance and Gail for long-term supply arrangements. Commercial production of gas is expected by the end of 2004. The use of gas will substantially reduce the cost of production since imported coke is very costly,” Panda said.
RINL, better known as Vizag Steel Plant, also plans to expand the capacity of its power unit from 248 mw to 308 mw. It plans to use gas in generating electricity as well.
On the question of technology to be used for the project, the company prefers west European know-how to Russian expertise, especially in the case of mills.