State-owned Steel Authority of India Limited (SAIL) on Friday announced its plans to invest Rs. 1.5 lakh crore and expand capacity to 50 million tonnes per annum (mtpa) by 2025.
“We intend to ramp up our capacity to 50 mtpa by 2025. Our present hot metal capacity is 14 mtpa. This will go up to 24 mtpa with the completion of ongoing expansion and modernisation works by next year. We are taking many other modernisation and expansion programmes which will take our capacity to 50 mtpa which will require an outlay of around Rs. 1.5 lakh crore,’’ SAIL chairman C.S. Verma told press conference in New Delhi.
“As on today, our net worth is Rs. 41,000 crore and going by a conservative debt-equity ratio, our borrowing power is Rs. 82,000 crore. Today our borrowing is Rs. 21,000 crore and most of the expenditure on the ongoing expansions is over. So, we will be generating more net worth,’’ he added.
The proposed capacity expansion, he said was line with Prime Minister Manmohan Singh's vision of enhancing India's steel-making capacity to 300 mtpa by 2025 from 85 mtpa at present.
Mr. Verma said most of SAIL expansion would be carried out through brownfield projects in existing five steel mills, barring one proposed at Sindri, where the plan is to set up a 5.6 mtpa greenfield steel plant. “We will start work on increasing capacity to 50 mtpa as soon as the current phase of expansions is over next year,’’ he added.
The potential of steel demand in India is huge as per capita consumption, at 57 kg, lags far behind the world average of 214.7 kg and China's average of 459.8 kg.
On coking coal, a crucial raw material for which SAIL has to mostly depend on imports, Mr. Verma said the company was on the look out for mines through International Coal Ventures (ICVL) in the US and Australia, not individually. “These are the two main markets. We are carrying out due diligence in four companies in these two countries. We are looking to acquire stake in coking coal mines in these two countries.
