Mining baron Anil Agarwal, bullish with his steel dreams, plans to invest Rs 30,000-Rs 40,000 crore in Jharkhand to expand Electrosteel Steel’s steel-making capacity. Vedanta Resources took over Electrosteel for a sum of Rs 5,320 crore via the NCLT, which added a new feather to his business of mining copper, zinc, aluminium, iron ore and oil. From mining, the company has entered into steel making and envisions a capacity like Bokaro Steel Plant of SAIL, which – after completion of its ongoing mass modernisation – is expected to reach a capacity of 10 million tonne per annum (mtpa). Bokaro at present produces 7 million tonne of liquid steel.
“Jharkhand chief minister Raghubar Das has approached me to make a second Bokaro in Jharkhand. I plan to expand the steel making capacity of Electrosteel and will put Rs 30,000-40,000 crore into it initially,” Anil Agarwal said on Tuesday at an interactive session organised by the Bharat Chamber of Commerce. He said the Electrosteel facility in Bokaro district at present is producing 1.5 mtpa, although it has an inherent capacity to produce 2.5 mtpa. “In the first tranche we will ramp up the production to 2.5 mtpa and then gradually put it up an additional 5 mtpa. I am committed to generate 50,000 employment at Jharkhand. Nothing has been particularly planned out as yet but we will do it,”Agarwal stressed.
Electrosteel produces pig iron, billets, wire rods, TMT bars, iron pipes and ductile pipes. Agarwal said it is not sustainable to run a steel making unit below the capacity of 5 mtpa. While he wants to pursue his steel dreams within the adjoining area of Electrosteel’s facility in Jharkhand, he said Vedanta Resources, would put up a 5-mtpa steel unit at Karnataka, which would entail investment of another Rs 30,000 crore.
Vedanta acquired the assets of Bellary Steel and Alloys in Karnataka fora sum of Rs 220 crore in 2011. Bellary Steel and Alloys was setting up a 2-lakh-tonne steel plant with provisions to take it up to 2 mtpa. But the promoters couldn’t complete the project and fell into debt trap in the middle.Vedanta took over the assets via a competitive bidding route and has already done a feasibility study for setting up the 5 mtpa steel unit.
In both Jharkhand and Karnataka, the steel making units have captive iron ore mines. In Jharkhand, Electrosteel has captive coking coal mine too. Agarwal said for the expansion in Jharkhand there is land but a little more needs to be acquired. The company has got the clearance of the iron ore mine, which was alloted to it in Jharkhand. In Karnataka it has 700 acres available for the expansion of Bellary facility.
However, on Tuesday he made clear that he would not run behind Essar Steel and would not increase his bid amount. “Arcellor Mittal has emerged as the highest bidder and I am with the Essar’s promoter group. My hands are full. I run a $8-million company and nothing comes if I don’t get a $1-million company. If it comes, it comes but I am not going to run behind it,” Agarwal said.
He said his first priority was to produce 50% of India’s total oil production and that should happen from the 41 blocks Vedanta has got in Assam through bidding under the first round of open acerage licensing policy. He was however eager to fund a study that would collect data on reserves of coal bed methane, methane and shale gas reserves in West Bengal.
“The study should be aimed at giving a comprehensive document to the government on the amount and condition of reserves and how private players can take part in exploring and exploiting the reserves,” he said. He stressed that the government didn’t have “any business of doing business”. “The PSUs should be opened up to the private players and run by shareholders.”
Source: Financial Express, December 26,2018