Jindal Plans $25 Billion Projects in Indian and Bolivian Steel, Iron and Power

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Researched by Industrial Info Resources (Sugar Land, Texas). Jindal Steel (NYSE:632286 ) (New Delhi/Bombay, India) is moving on major project plans in the steel, iron ore and power sectors. In the third week of July, Managing Director Naveen Jindal said that the company was planning a 6 million tons per annum (tpa) steel plant in Orissa and 3 million tpa steel plants in both Jharkhand and Chhattisgarh. The company is also planning to double the production of its existing 3 million tpa plant in Raigarh over the next three years. By 2015 the group is planning to invest $14 billion in the steel sector

Jindal is also investing $2.1 billion in Bolivia to set up an integrated steel unit with a capacity of 1.7 million tpa of long products and 6 million tpa of reduced sponge iron. The unit will also have a 10 million tpa pellet plant and a 450 MW power plant, which will be guaranteed a low cost gas feed. Commercial steel production will begin in 2010.

The company has signed a contract with the Bolivian government to develop the El Mutun iron ore mine, which claims to have the potential to be the world’s largest with a reserve of 40 billion tons of ore resource. The agreement allows Jindal to develop half of the mine’s capacity.

Jindal said that the contract had to be formally passed by the Bolivian parliament and that construction on the project was scheduled top start in three to four months time. “We will start selling iron ore concentrate at a rate of 10 million tpa from the first year,” he said. The Bolivian government has imposed a restriction, limiting the export of iron ore to 10 million tpa. Jindal added that the company intended to expand investment in the project after assessing the growth.

Jindal said that the project would open further business opportunities for Indian corporate houses in Latin America. Jindal would be partnering the Bolivian government and the people to contribute positively to the growth of the economies of both countries. Jindal will also look for opportunities to invest in other South American nations.

In the power sector in India, the company will invest $9.7 billion in thermal and hydropower plants to expand its current power generation base from 1,000 MW to 10,000 MW by 2015. Currently Jindal Power Ltd is constructing a coal fed, 1,000 MW super critical thermal power plant at Tamnar in Raigarh district of Chattisgarh. The first 250 MW phase will be completed by September and the entire project will be completed by June 2008.

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