The recent decision of the Supreme Court capping iron ore production at 30 million tonnes per annum in Karnataka has not deterred iron and steel companies from expanding their capacities. Both the existing and new steel companies have lined up expansion plans as well as set up greenfield steel plants in the ore-starved Karnataka state.
While, the new-comers like Arcelor Mittal and Posco are still awaiting allotment of captive mining leases before commencing work on their respective six million tonne per annum Greenfield steel plants in the state, existing manufacturers like JSW Steel Ltd, BMM Ispat Ltd and Kalyani Steel among others have planned expansion.
During the recent Global Investors’ Meet (GIM 2012) organised by state government as many as eight companies have signed memorandum of understanding to make a combined investment of Rs 91,782 crore in the iron and steel sector in Karnataka. These are NMDC, JSW Steel Ltd, JSW Projects Ltd, BMM Ispat Ltd, Mukand Ltd, Zeenath Transport Company, Tata Steel Ltd and Kalyani Steels Ltd. Among these companies, JSW Steel Ltd, BMM Ispat Ltd and NMDC are in various stages of implementing their projects. While, NMDC and BMM Ispat have their own captive mining assets, JSW Steel Ltd, which is the single largest investor in the private sector in Karnataka, does not have captive mines.
JSW Steel currently operates a 11 million tonne per annum steel plant at Toranagallu in Bellary district of Karnataka, BMM Ispat Ltd operates a 2.4 million tonne per annum steel plant at Hospet in Bellary district. BMM Ispat Ltd, the second largest steel producer in Karnataka, has proposed to set up a 3 million tonne per annum natural gas-based steel plant and a 440-Mw gas-based captive-cum-merchant power plant. It presently operates a 2.4 MTPA steel plant at Hospet. “We are presently setting up a 1.3 MTPA beneficiation plant along with blast furnace, coke oven and sinter plants with an output of 2 MTPA. We have tied up with a consortium of banks led by State Bank of India for a loan of Rs 4,200 crore for this project,” an official spokesperson of BMM Ispat said.
He said the company has already received an approval from the State High Level Clearance Committee for its project and would approach the ministry of environment and forests (MoEF) once the Supreme Court settles all mining issues. BMM requires about 4.8 million tonnes of iron ore to meet its expansion plans. It already procures about 4 million metric tonnes of iron ore per annum for its existing plants.