The Hindu Business Line : Bokaro Steel to expand capacity by 75 pc

STEEL Authority of India Ltd (SAIL) will increase the capacity of its Bokaro Steel Plant (BSP) by 75 per cent over the next seven years, from four million tonnes to seven million tonnes, the BSP Managing Director, Mr U.B. Singh, told visiting newspersons here.

In the ongoing first quarter, Mr Singh said, the plant has performed well despite coal shortages and profits would be on expected lines.

"During the April-June 2004 quarter, there was almost a 20 per cent shortage of coal supply. But still we are on target. The plant's profit target for the year is Rs 1,200 crore and in the first quarter, we would not be less than the targeted amount," he said.

"The present four million tonne capacity for making hot metal will be increased to seven million tonnes by 2011. Already, work has started and I will go to the SAIL board with more proposals and get funds sanctioned," he said.

According to available estimates, the total cost for the expansion of the Bokaro plant would be approximately around Rs 7,800 crore though the exact amount is yet to be worked out.

Mr Singh said that for hot metal capacity expansion, various associated projects were also being undertaken, including new oxygen plants.

"We would be setting up a 2,500-tonne oxygen plant in two phases of 1,250 tonnes each. The first phase would be completed by 2006-07 while the second phase would be over in 2011," Mr Singh said, and added that the company would execute the project on a build-own-operate (BOO) basis for which a tender would be floated shortly.

He said that the recent coal crisis has enabled BSP to experiment with alternative ways and the results have been good.

"The various projects in the pipeline include slag granulation of Blast Furnace I, coal granule injection in Blast Furnace II and tar injection in Blast Furnace III," he said.

Currently, BSP is operating only four of its five blast furnaces. The company hopes to come out of the coal crisis by July and plans to start the fifth furnace soon after.

BSP is also working on plans for setting up sponge iron capacity and cement capacity. The necessity for setting up a cement plant arises out of the need to dispose of granulated slag after the new capacities are in place.

For the cement plant, the company is in talks for a possible joint venture with Cement Corporation of India Ltd (CCIL) to put up a one million tonne cement plant here. Now, it is for CCIL to decide whether to set up a new plant here or relocate one of its closed plants to Bokaro, Mr Singh said.

For the sponge iron capacity, however, the company is also looking for private parties who would put up a sponge iron making plant with 500 tonnes per day (tpd) capacity.

"We would give them the ore which they would convert to sponge iron and give us. We are ready to enter into an MoU with a private party for this venture," Mr Singh said. Already, the matter has been discussed with several companies, he said.

SAIL had also commissioned a feasibility report from MECON for setting up its own sponge iron capacity in Bokaro.

"We have the feasibility report from MECON and finally we will make the best choice between the available options," he said.

BSP is also setting its eyes on auto grade steel once its expansion plans are through. Talks are on with Maruti for supplying steel for manufacture of auto components.

"For the extra deep drawing auto grade steel used for making the body we would have to upgrade our rolling mill and so wait for some time," he said.