The National Mineral Development Corporation (NMDC), the country’s largest iron ore producer, has decided to establish an integrated steel plant with a capacity of five million tonnes per annum (MTPA) in Bellary district with an investment of Rs. 9,280 crore.

The public sector NMDC will set up the plant in the special industrial zone to be set up in Bellary, Hospet and Sandur taluks by the Vijayanagar Area Development Authority (VADA).

Officials in the Department of Medium and Larges Industries told The Hindu that the mining major had sought 5,000 acres for setting up the plant. However, the screening committee of the Industries Department, which assessed the requirement of land for the project, found that the extent of land requested for the project was on the higher side and said 2,500 acres would be sufficient for a five MTPA plant. Representatives of the company said it needed 5,000 acres to expand capacity to 10 MTPA later.

The State High-level Clearance Committee headed by Chief Minister B.S. Yeddyurappa, which met recently, has approved the project and directed the Karnataka Industrial Areas Development Board (KIADB) to acquire land on behalf of the NMDC, the officials said.

The company, which has an annual sales turnover of over Rs. 6,400 crore, will invest Rs. 900 crore on land and building, Rs. 6,000 crore on plant and machinery, Rs. 1,880 crore on working capital margin and keep Rs. 500 crore for contingencies. It will mobilise the amount from promoters’ equity, including reserves (Rs. 5,568 crore) and term loans (Rs. 3,712 crore).

Company officials have requested the Government to ensure that VADA supplies water at 16.88 million gallons per day from the Alamatti dam in Bijapur district. The Gulbarga Electricity Supply Company (GESCOM) will supply 500 MW a year to the plant, the officials said.

The steel plant is expected to provide employment to 2,500 persons, and the State Government has requested the promoter to give preference to local people.

Before beginning work on the project, the Government has directed the NMDC to obtain environment clearances from the Karnataka State Pollution Control Board and Union Ministry of Environment and Forests. The company would be eligible for all incentives and concessions available under the State’s Industrial Policy, the officials said.

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