The Hindu Business Line : AML Steel plans to invest Rs 1,944 cr in Jharkhand plant

THE Chennai-based AML Steel Ltd announced today that it has planned an investment of Rs 1,944 crore to set up a steel manufacturing plant in Jharkhand.

The company has recently been granted mining rights for iron ore from the Ministry of Mines. It has signed an MoU with the Jharkhand Government, which has allotted it a 20-year lease of iron ore mines.

The project will be implemented in three phases. The first phase would require an investment of Rs 114 crore. This requirement would be funded through a combination of equity and debt.

The debt portion (Rs 50 crore) has been tied up. For the equity portion, the company is planning to enter the capital market with a follow-on public issue.

At present the company's shares are listed on regional stock exchanges. The shares have not been traded for several years.

This time around the shares would be listed on the Bombay Stock Exchange and the National Stock Exchange.

The company said it is at an advanced stage of civil construction at the project site. Orders for capital equipment have been placed and are scheduled to reach the plant site on schedule.

Quoting geological surveys and estimates by experts, the company said the 384-acre mine site has reserves of 25 million tonnes.

"This is adequate to meeting the requirements of the company in the medium to long term as it would require only 1,76,000 tonnes per annum in the first phase,'' Mr Ashok Agarwal, Managing Director, AML Steel, said.

The Jharkhand unit will also have a captive power plant to not just ensure continuous power supply but also cheap sources of power.

The company said it has plans to go in for a forward integration project by setting up rolling mills at its Pondicherry unit and Karaikal.

The 2 million capacity would largely include long products. The company's decision to go for long products is to take advantage of the buoyant infrastructure and construction sector, Mr Agarwal said.