SAIL Wants to Build Steel Plant on FCI's Unused Plot in Jharkhand

SAIL Co keen on building plant at site as it can be integrated with its Bokaro unit

State-owned Steel Authority of India, or SAIL, will develop an unused 6,500-acre plot owned by Fertiliser Corporation of India at its Sindri unit in Jharkhand, but will wait for liberal terms from the government before moving forward. "There have been informal discussions with the fertiliser ministry and we are waiting for a clear proposal from them including the rate at which the land can be given, before we take a final call," SAIL chairman CS Verma told ET recently.
The government initiated the talks to revive the Fertiliser Corporation unit which has been shut since 2002. The plan included various sale options apart from the idea of giving the land to another state-owned enterprise.
SAIL is keen on building a steel plant at Sindri as it can be integrated with the company's existing unit at Bokaro which is 60 km away and can also use ore from the nearby mine at Gua.
According to persons familiar with the talks, SAIL had insisted on the land at Sindri after unconfirmed reports that ArcelorMittal India had plans of approaching the government for permission to build a steel project at the site.
Mr Verma declined to comment on SAIL's estimate for the land at Sindri. "The size of the land is adequate for a 5-million-tonne steel plant," was all he added. The cost of building a 5-million-tonne steel plant is about 22,000-23,000 crore, by industry estimates.
While the talks are still on, persons familiar with the matter say the fertiliser ministry has asked SAIL to consider the option of building a fertiliser unit at the site. SAIL, on its part, has asked for the land after clearing all issues, including the eviction of squatters. The Sindri project is one of the three future growth options SAIL is considering; the other two being a proposed joint venture with Posco and the revival of the erstwhile Malavika Steel at Jagdishpur.
Also, a 5-million-tonne plant at Sindri would be in line with SAIL's target of reaching a total capacity of 25 million tonnes by 2013. Currently, SAIL manufactures about 13 million tonnes of the alloy annually and has outlined plans of building an additional 9 million tonnes in Oman, Mongolia and Indonesia for about $10 billion.
The government on Tuesday said a proposed follow-on offer in SAIL would be initiated in June 2011 that would part-finance the expansion plans. The privatisation plan includes selling 10% equity stake in SAIL, while an additional 10% of the expanded equity base will also be issued.
Steel co to wait for govt nod

• Co has been in talks with
fertiliser ministry and is waiting for a clear proposal regarding the rate at which the land will be sold

• Co says the land is adequate
to build a 5-million-tonne steel plant. The cost of building a plant of such capacity is 22,000-23,000 crore, by industry estimates

• According to sources, fertiliser ministry has asked SAIL to consider building a fertiliser unit at the site

• SAIL, has asked for the land
after clearing all issues, including the eviction of squatters