Plant to be funded through internal accruals, public offering
The IndianSteel Alliance has held argued for captive mines for steel plants and a ban on export of iron ore
It hasalso said that iron ore resources will be available for the next 20 to 30 years
Mumbai, Sept. 22
The Rs 2,200-crore steel plant of MSPL Ltd, the Hospet-based mining and iron exporting company, will be ready for operations in 2009, said Mr Shrenik Baldota, Executive Director, MSPL Ltd.
The plant will have a capacity to produce 1.2 million tonnes (mt) of iron pellet and 1.05 mt of steel per annum. The company plans to scale up its capacity to 5 mt in five years.
"MSPL and the steel company would be two different entities. We may not even use our own ore. We may approach other ore extraction companies for raw material to our steel plant. We are against steel companies having their own iron ore mines," said Mr Shrenik Baldota, Executive Director, MSPL Ltd.
The company proposes to fund the steel plant through internal accruals and a public offering. "We have filed a DRHP with SEBI. We will float the issue at an appropriate time," said Mr N.K. Baldota, Chairman, MSPL Ltd.
Iron ore export
Speaking on issues plaguing the iron ore exports sector, Mr Shrenik Baldota said, "Instead of evaluating the Hoda Committee Report, the Indian Steel Alliance (ISA) has held two subjects close to its heart - captive mines for steel plants and ban on export of iron ore. ISA has unleashed a misinformation campaign stating that iron ore resources would last only 20 to 30 years. Their call that the Supreme Court has banned mining of magnetite resources is not true."
As a matter of fact, ore resources are growing in the country. More reserves have been discovered with intensive mining and exploration. Iron ore resources in India will last for 110 years even if steel production touches 110 mt by 2020, said Mr Baldota.
He pooh-poohed the claims of the ISA saying that the sector is growing by leaps and bounds.
The surge in demand for ore products in China has bolstered the export figures of the iron ore sector in India. The sector has witnessed a near-300 per cent growth in the last five years. In the case of steel, it is only a "meagre 7.4 per cent."
Steel making cos
"Steel manufacturing companies are not interested in using iron ore `fines' (fragmented ores) for steel making because it is a lengthy process. They only use `lump' ores for making steel. Steel companies having their own mines have stock-piled tonnes of fines in their mines. This may create environmental hazards and pollute rivers and affect agriculture fields," said Mr Shrenik Baldota.
The MSPL officials also commented on the inefficiency on the part of steel manufacturing companies to increase steel production in the country.
"Steel companies are advocating a ban on iron-ore exports to strangulate this sector. This will paralyse the sector making them easy buy-out targets for these companies. We request the Government to stop leasing out mines to steel plants," said Mr Baldota.