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Tata Steel flags off Indias largest greenfield plant

Thu, 19th Nov 2015 (Source:Financial Chronicle)

EVEN as Tata Steel’s UKbased unit is reportedly up for sale, thanks to a downturn in the steel industry across Europe, the company on Wednesday flagged off its Kalinganagar Steel Plant, the largest single-location greenfield steel project in India. The first phase of 6mtpa project will produce worldclass flat, lighter, high-tensile streng th steel and will augment its Indian production to nearly 13mtpa of crude steel. Significantly, Tata Steel has already revised its original plan of putting up a 6mtpa plant and decided to expand the capacity to 16 mtpa with an investment of Rs 1 lakh crore by 2025. 
 
The commercial commissioning of the plant may take another three months as the critical steel making departments like blast furnace, sinter plant and steel melting shop are yet to get state pollution control board clearances. Peripheral units like the captive power plant, coke plant and hot strip mill have already received environmental clearance. Odisha chief minister Naveen Patnaik on Wednesday dedicated the plant to the state. 
 
The new plant will keep Tata Steel at an advantageous position in the auctions of iron ore mines due next month. Mine auctions accord priority to bidders with plants. Tata Steel already has eight captive iron ore mines in Odisha and is eying more deposits after the Kalinganagar project. “We have invested Rs 25,000 crore in the first phase. We will be investing Rs 2,000 crore on developing the iron ore mines at Khandabandh that will feed the Kalinganagar plant. Kalinganagar would be the largest single location greenfield steel plant in the country," Tata Steel chairman Cyrus Mistry said. “This plant is our key commitment towards nation building and an effort to ensure sustainable growth. 
 
I am confident that the plant will achieve global benchmarks in steel production and at the same time will remain committed to growth and development of the state of Odisha,” he added. Tata Steel had first signed a memorandum of understanding with the Odisha government for setting up a 6 million tonne steel plant at Kalinganagar in November, 2004 at an estimated cost of Rs 15,400 crore. But due to a prolonged agitation by the people who lost their lands, work could not be taken up till 2010. As a result, the project cost for the first phase has mounted to over Rs.25,000 crore. 
 
At least 13 tribals were killed in police firing in 2006. On Wednesday, the Odisha chief minister termed Tata Steel’s Kalinganagar steel facility as a milestone in the state’s industrial progress and said that investment on the project, the company's only greenfield plant apart from Jamshedpur, could eventually go up to Rs 1 lakh crore by 2025. "In the first phase, Rs 25,000 crore has been spent by Tata Steel (on the Kalinganagar project), creating direct employment opportunity for 3,000 people and indirect employment for 22,000 people,” he said. T V Narendran, managing director (India & South East Asia), Tata Steel, said the Kalinganagar plant will deliver a wider product range, and would strengthen the company's presence in auto and oil & gas sectors. 
 
Initially, iron ore from Joda mines will cater to the plant’s first phase requirement till 2017. Subsequently, the Khandabandh mines, which have a mining capacity of 5 mtpa, will meet the plant's requirement through 2020. "The Kalinganagar plant will enhance the future competitiveness of Tata Steel in terms of cost competitiveness and profitability and this investment demonstrates Tata Steel's alignment with the Government's Make in India strategy," said Kaushik Chatterjee, group executive director (finance & corporate). 

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