India's Steel Production in High Growth Phase with Three New Projects to Add 17 Million Tons

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Researched by Industrialinfo.com (Industrial Information Resources Incorporated; Houston Texas). New steel mills planned in India will add a total of 17 million tons to the national production total and require about 2,000 MW of power from dedicated power plants and the grid.

At the end of June, Essar Steel (India) met with government officials and Chief Minister of Jharkand state, Arjun Munda, to present its plans for a $1.275 billion steel plant to be built in two phases. A memorandum of understanding (MoU) had already been signed between the two parties for the 6-million-ton-per-annum steel plant, which is scheduled to start production 24 months after land has been acquired and the necessary infrastructure developed.

It is reported that Essar Steel is keen to begin the first phase of production in 2007, with the target for the first phase of production set at four million tons and two million tons in the second phase. The company will import production equipment from Korea for the plant.

A 2,500-acre site for the plant has been chosen in Manorharopur, subject to final approvals following previously conducted surveys. If the planned schedule is to be met, coal supplies will have to be secured and Munda has undertaken to pursue this, in order to obtain the allocation. At present in India, securing coal supplies for projects is critical. This is especially true of a steel project, which needs feedstock for the steel plant and for a dedicated power station, which will have a generating power of about 500 MW at the Essar project. For related news item see - May 31, 2005 - Essar Group Positions to Become Major Global Steel Producer

A week later, Jindal Steel and Power (New Delhi, India) signed an MoU with the Jharkand government for the construction of a 5-million-ton-per-annum integrated steel plant with a 1,000 MW dedicated power plant included in the project. The site for the $2.65 billion project has not been finalized, but the company is looking for a site between the 'steel city' of Jamshedpur and Chadil.

The steel project is expected to generate about 10,000 jobs and create indirect employment for another 30,000 people. Jindal Steel has said that it will ‘generously execute’ the company’s community development schemes in Jharkand.

In Orissa state, Jindal Steel and Power has expanded the specification for a steel plant from two million tpa to six million tpa and transfer the plant site from Keonjhar to the Angul district. The ore handling plant will remain in Keonjhar, and the blast furnace and main production unit will be in Angul.

The IISB (International Steel Statistics Bureau) reports that in April, Indian steel production for the month showed a year-on-year increase of 21.5%, which brought the total production for the first four months up by 10.7%, to 11.8 million tons, which was above Brazil's and Italy's year-to-date totals. China's output increased 25.4% in April and by 24.8% in the first four months of 2005, to 105.9 million tons.

In May, the production of crude steel in the 61 countries reporting to the International Steel Statistics Institute was estimated to be 95.4 million tons. This was 10.3% above the May 2004 total, and the year-to-date was 8.1% higher than the same total in 2004, at 456.7 million tons. But, if China's contribution to the total was stripped out, the increase over the first five months of the year was only 1.5%.

With a number new steel production projects in Jamshedpur and Orissa now at the project planning and pre-construction phases, and high growth in domestic demand, India will continue to move up the global steel production table through 2010. For related news item see- June 29, 2005 - Posco and Tata Commit $18 Billion to Indian Steel Projects - Mittal to Come

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