June, 03 2005
Tata to invest in Bastar
The Tata group has decided to set up mega steel plant in the naxal infested Bastar region of Chhattisgarh with an investment of about Rs 5000 crore.
The state government today cleared the proposal of the Tata Iron and Steel Company Limited for setting up of an integrated steel plant in Bastar, sources close to the Chief Minister told PTI here.
The integrated steel plant will have a capacity of five mt for which the Tata will invest over Rs 5000 crore, sources said.
The project will change the future of the underdeveloped and tribal dominated Bastar region of the state, they said.
Currently, Sail unit's Bhilai steel plant is the only major steel plant in the state, which is also giving a good revenue to the state government as taxes.
The National Mineral Development Corporation had announced to start a mega steel plant in Nagarnar of Bastar district, but the project has been delayed because of the selection of technology for the project, sources said.
The state government has also cleared the proposal of a joint venture 1000 MW thermal power plant with an investment of Rs 5000 crore, sources said.
The IFFCO and the Chhattisgarh State Electricity Board (CSEB) would jointly set up the power plant in another under developed area of the state in Sarguja district, located north of the state, they said.
Ispat, Essar switch to scrap & save $100/tonne, sell off sponge iron
Steel manufacturers are changing their production strategies as prices of crucial raw materials like sponge iron and scrap prices have reversed. Scrap prices are now lower than sponge iron.
Steel manufacturers are now opting for merchant sales of sponge iron, which was otherwise used captively and was earlier cheaper than scrap. Sponge iron is now being substituted with scrap that has become cheaper over the past few months. This will also lead to cost saving of over $100 per tonne of production.
Ispat Industries, which has 1.6 million tonnes of sponge iron capacity has decided to aggressively enter the sponge iron market from June 2005. Earlier, Ispat was captively consuming its sponge iron production. Essar Steel, which has 3.5 million tonne of sponge iron capacity, may also explore the possibility of using more scrap in the production of steel.
Ispat and Essar use electric arc furnaces to melt steel and this makes it possible for them to use different raw materials. International scrap prices have dropped from levels of $300-285 per tonne to $200 per tonne while sponge iron prices are still at levels of $325 per tonne, which means steel manufacturers can save $100 per tonne in manufacturing cost .
Selling the sponge iron in the open market, at the same time, would add to revenues. Essar officials, however, said that raw material substitution has its own limits. The officials added that scrap cannot be used for making high end steel as its purity and chemical composition may not be up to the mark thus effecting the quality of steel.
With international scrap prices seeing a significant fall in last two months or so, Ispat has decided to use more of scrap at its Dolvi operations, said sources.
