| SAIL chairman V.S. Jain in New Delhi on Friday. Picture by Rajesh Kumar
New Delhi, July 28: The board of Steel Authority of India today approved a Rs 9,592-crore plan to turn Burnpur-based Indian Iron and Steel Company (IISCO) into a modern steel mill with a capacity of about 2.5 million tonnes.
Besides the IISCO modernisation plan, the SAIL board today cleared a 7-lakh-mtpa bar and rod mill for Durgapur Steel Plant at an estimated cost of Rs 738 crore.
The board has also approved the upgradation of a blast furnace and rebuilding of a coke oven battery at Bokaro Steel Plant at a cost of Rs 593 crore.
These investment decisions are among SAIL chairman V.S. Jain’s last important ones before he retires this month-end.
The government has, however, not officially selected any successor to Jain as yet.
SAIL officials said the facilities to be installed as part of the IISCO modernisation project include a seven-metre-tall coke oven battery, two 204-square-metre sinter machines, a new blast furnace with a capacity of 4,600 cubic metre.
Other facilities include three 150-tonne converters, two six-strand billet casters and one four-strand beam blank/bloom caster, a new six-lakh-tonne universal section mill and a wire rod and bar mill.
IISCO, which owned the iron ore-rich Chiria mines, was merged with SAIL to give the steel behemoth a much needed raw material base.
Chiria in Jharkhand, which has estimated reserves of 2 billion tonnes of high grade iron ore, is being eyed by all steel makers ' from the Mittals to the Jindals and the Tatas.
Officials said the IISCO modernisation had been planned in such a way that its product mix would complement that of Durgapur.
The new bar and rod mill being set up at Durgapur is in turn expected to raise the plant’s finished steel output from 45 per cent to over 75 per cent of total product mix. The mill aims to “offer a complete package to the construction segment,” officials said.
While announcing the first quarter results of the steel behemoth for the current fiscal, Jain said SAIL would be funding the updates and expansion programmes from internal resources.
The company has posted a profit after tax of Rs 1,386 crore in the April-June period, a 23 per cent increase over last year’s first quarter. Sales turnover for the quarter grew by 29 per cent at Rs 8,412 crore compared with Rs 6,520 crore in the year-ago period.
The company’s quarter-on-quarter steel production grew by 9 per cent at 3.1 million tonnes and sales grew by 20 per cent in the same period at 2.45 million tonnes.
“We achieved the improved financial performance despite a 27 per cent increase in imported coking coal price,” Jain said.
SAIL officials said the steel maker reduced its borrowings from Rs 4,298 crore as on March 31, 2006 to Rs 4,000 crore on June 30, 2006. As a result, the company’s interest outgo during the first quarter was substantially lower at Rs 94 crore.