Vedanta on expansion mode, to invest $300 m in Electrosteel plant

Vedanta Ltd will invest $300 million (approximately ₹2,100 crore) to scale up steel-making capacity of Electrosteel Steels plant in Jharkhand by an additional one million tonne (mt) per annum to 2.5 mt in next two years.

According to Anil Agarwal, Founder and Executive Chairman, Vedanta Resources, plans are afoot to set up an another 4-5 mt steel-making unit beside the existing Electrosteel facility at an estimated investment of $3-4 billion (approximately ₹30,000 crore).

“The Electrosteel plant has an inherent capacity to produce 1.5 mt. Our immediate plan is to scale it up to 2.5 mt over the next two years,” Agarwal told newspersons here on Tuesday.

Vedanta, it may be recalled, had acquired Electrosteel Steels at ₹5,320 crore.

The company is also looking into the ‘feasibility’ of setting up an additional 4-5 mt plant, which is likely to be partly brownfield and partly greenfield.

“We have 2,200 acres at the existing facility in Jharkhand, we may need to acquire a little more,” he said.

In talks with global firms

The company is in talks with Korean, Japanese and Chinese firms for technology and machinery for its proposed expansion.

Agarwal hoped that requisite clearances for thze project would be in place in six-to-eight months and it might take three-four years for it to fructify.

“We plan to make another Bokaro,” Agarwal said during an interaction organised by the Bharat Chamber of Commerce earlier in the day.

Bellary unit

It is also mulling a 5-mt steel plant at Bellary in Karnataka, which may entail another investment of ₹30,000 crore.

India’s largest iron ore producer and maker of various non-ferrous metals such as aluminium and zinc, Vedanta had in 2011 acquired the assets of Bellary Steel and Alloys for ₹220 crore through a competitive bidding process.

“Ideally, we would look at a 5-mt capacity. The feasibility studies are on,” he added.

Vedanta Ltd has committed total investments of $8 billion (approximately ₹56,000 crore) in India across oil and gas, aluminium, copper, zinc, silver and steel sectors over the next three years.

Agarwal indicated that the company would be keen on investing in West Bengal if given a right opportunity. “It (investing in Bengal) is definitely on the card but our hands are full at the moment.”

He was referring to the Deocha Pachami coal mine, which is the second largest mine in the world with estimated reserves of 2.1 billion tonnes.

According to him, if the State government can explore the mine then it could be a ‘game changer’.