India's SAIL to Invest $2.64 Billion in 2010-11

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Researched by Industrial Info Resources (Sugar Land, Texas)--Steel Authority of India Limited (SAIL) (BSE:500113) (New Delhi, India) will invest $2.64 billion from April 2010 through March 2011 for the company's next phase of expansion and modernization.

During the corresponding 12 months of 2009-10, SAIL made capital expenditures of $2.28 billion as part of its ongoing expansion and modernization program.

These investments are part of SAIL's $15 billion expansion and modernization program to ramp up annual steel production to 23.5 million tons per year by 2013, from 14 million tons at present.

SAIL runs five integrated iron and steel complexes in Bhilai (Chattisgarh), Durgapur (West Bengal), Bokaro (Jharkhand), Burnpur (West Bengal) and Rourkela (Orissa), and four iron and steel alloy production plants in Bhadravati (Karnataka), Chandrapur (Maharasthra), Durgapur (West Bengal) and Salem (Tamil Nadu).

The largest steel mill is in Bokaro, Jharkhand. The ongoing expansion and modernization will raise the capacity of the Bokaro plant from 5 million tons per year to 7 million tons per year. As a separate investment, SAIL also proposes to set up a 12 million-ton-per-year greenfield steel mill near the Bokaro mill.

One of the major projects that has been completed is the upgrade of Blast Furnace 2 at the Bokaro steel mill at a cost of more than $172 million. The upgrade increased the furnace's working volume from 1,758 cubic meters to 2,250 cubic meters by incorporating state-of-the-art technology.

The capital expenditure also completes the current phase of capacity additions to the Salem steel mill, SAIL's special steels unit. Hot trials are scheduled in August. The facilities that will be up for trial are an electric arc furnace, a ladle furnace, an AOD convertor, a slab caster and a new Sendzimer mill. These will add 180,000 tons of high-value stainless steel products to SAIL's product mix.

In the next phase of capital expenditure, the Salem steel unit will have a steel-melting and continuous-casting facility to produce 1.8 million tons of slabs. The cold-rolling mill will be expanded from 65,000 tons to 1.46 million tons of rolled stainless steel products. An additional roll-grinding machine will be added to the hot-rolling mill.

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