Tata Steel Announced 6MT Capacity Expansion in Kalinganagar Plant

Tata Steel Ltd is planning to initiate second phase expansion at Kalinganagar plant in Odisha to double its capacity to six million tonne per annum (mtpa), but has no proposal to set up another greenfield steel plant in immediate future.

BHUWNESHWAR: “Sometime in the next six months a proposal will be sent to our board for its approval to start the second phase work at Kalinganagar, while the focus now is to achieve full three mtpa capacity in first phase fast,” Tata Steel managing director (India and south-east Asia) T.V. Narendran said.

He also said the Kalinganagar plant, set up at an investment of over Rs.25,000 crore, is likely to reach break-even by the end of this financial year.

After achieving the first phase rated capacity of three mtpa, second phase expansion can be taken up, Narendran said.

However, the steel maker has no plan to set up a third greenfield steel plant in the country in the near future, and would rather concentrate on raising capacities of its existing plants at Jamshedpur and Kalinganagar, Narendran said.

Noting that the Jamshedpur plant’s present capacity stands at 10 mtpa, he said its capacity would go up to 11 mtpa as an approval has been obtained to add one million tonne more.

Thus, both Jamshedpur and Kalinganagar would churn out up to 17 mtpa post expansion.

Tata Steel, which has 2,000 acre of land in Kalinganagar, is already in the process of getting another 1,000 acre, Narendran said, adding that with 3,000 acre of land, the newly set up steel plant would even be in a position to raise capacity up to 15-16 mtpa in a phased manner.

Despite challenges before the steel sector both at home and abroad, expansion ventures would continue to raise steel-making capacity in India as demand in the country is projected to rise by 5-6%, he said.

Referring to raw materials, he said while Kalinganagar plant is iron ore self-sufficient, the steel maker at times procures iron ore from Odisha Mining Corp. Ltd, whose mine is barely 20-30km from Kalinganagar.

Price of iron ore is not much different from the cost involved in mining and the company opts for either, depending on economies.

He said Tata Steel also intends to participate in next round of auction of iron ore mines as it seeks to expand.

While 65% of the coking coal requirements are met through imports, the rest 35% is drawn from Tata’s own mines, Narendran said, adding the steel maker would continue to import keeping in mind the expansion plans and future requirements.

Regarding export of products from Kalinganagar, Narendran said soon after commencing commercial production, the new unit has already started export of Ferroshots and hot-rolled coils.

Tata Steel’s Jamshedpur plant is exporting to south-east Asian countries and Kalinganagar unit will also export products manufactured by it to these countries, he said.

Earlier this month, Tata Steel flagged off its first consignment of hot-rolled steel export rake to Nepal from Kalinganagar.

On the question of minimum import price, Narendran said it is helpful in giving the industry some respite against cheap imports and the industry appreciates this support from the government.

But, the prices in the country are determined by demand-supply scenario.

The whole issue, he said, needs to be treated in a holistic and comprehensive manner.

On the projects at Gopalpur, Narendran said that the ferro-chrome plant being constructed at the site and is expected to be commissioned in November, while work on special economic zones is also gaining pace.