The Hindu Business Line : Dasturco to prepare concept paper on IISCO expansion

INDIAN Iron & Steel Co Ltd (IISCO), which is being merged into Steel Authority of India Ltd (SAIL), has appointed steel consultant Dasturco to prepare a concept paper on its proposed expansion plan.

According to Mr H.M.P. Singh, Managing Director of IISCO, the concept paper is likely to be ready very soon. The paper would then be placed before the board of directors of both IISCO and SAIL.

"Once the respective boards of directors accept the concept paper, Dasturco will be given the mandate to prepare a detailed feasibility report on the expansion plan," Mr Singh told Business Line.

IISCO, which is India's oldest steel plant, has decided to expand its liquid steel production capacity from the existing 0.5 million tonnes per annum to 1 million tonnes per annum. The plant has plans to create 0.25 million tonnes of pig iron production too.

"This is our immediate target and we want to reach this production target by 2006-07. The cost of the projects would be around Rs 400 crore - Rs 500 crore," he said.

As a follow-up of this expansion programme, IISCO is contemplating increasing its capacity further to two million per annum. It will be a brownfield expansion project and its cost would be approximately Rs 3,000 crore.

"The second phase of the expansion programme will be in tune with the total expansion programme worked out by SAIL and clearly stated in its corporate plan. We too wish to have this expanded capacity in place by 2011-12," he said.

The product profile of IISCO, which is now only a long-product plant, will be accordingly changed with the expanded capacity, Mr Singh said.

For the first phase of expansion from 0.5 million tonnes to one million tonnes, IISCO has decided to opt out of the blast furnace route and produce steel by using sponge iron in arc furnaces.

In the second phase, where capacity will be extended by up to two million tonnes, IISCO has proposed to set up new blast furnaces. As of now, it has decided partially to refurbish and modernise three of its existing four blast furnaces from internally generated funds.

Regarding the mining activities of IISCO, he said, Mecon had been appointed to prepare a detailed project report for the modernisation of the Chiria iron ore mine. Similarly, the National Environment Engineering Research Institute is carrying out an environment study on this mine.

IISCO has also sought lease renewal of the Chiria mines from the Jharkhand Government.

For the current financial year, IISCO is hoping for a sales growth of 7-10 per cent against the Rs 1,089-crore it achieved in 2003-04. Net profit is expected to touch the Rs 300-crore mark.

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