SAIL will invest $12 b to set up 4 plants overseas

Steel Authority of India Ltd plans to invest $12 billion (about Rs 54,000 crore) to set up four steel plants abroad.

“We will invest about $12 billion to set up four overseas units. Each of these units will have a capacity of 3 million tonnes,” said Mr C.S. Verma, SAIL Chairman, on the sidelines of a steel conference organised by the Indian Chambers of Commerce.

The country's largest public sector steel producer will fund these projects with 70-80 per cent debt and the rest via equity. SAIL will also try to rope in strategic investors for these projects.

The plants are likely to be located in Mongolia, South Africa, Oman and Indonesia, where SAIL is in talks already. The company is in talks with the Mongolian Government to secure raw materials for the proposed steel plant there. In Oman, SAIL is in talks with the Government to set up a gas-based steel plant with an investment of $3 billion.

The steelmaker had also agreed to set up a 3 million tonnes per annum plant in Indonesia's Kalimantan province in January. Mr Verma said that talks are on with the governments of these countries to secure supplies of coking coal, iron ore and gas.

“We will source coking coal for the plants from those countries and will export the surplus to India,” he said.

Mr Verma said that setting up these plants will take at least three years from the time the company signs an initial agreement with the governments.

Disinvestment plans

SAIL's disinvestment plans entail the company issuing 10 per cent fresh equity in two tranches which would see the company raise Rs 8,000 crore. The first tranche of the disinvestment, in which SAIL will issue 5 per cent fresh equity to raise Rs 4,000 crore, is slated to take place end-March but could be delayed to the next fiscal.

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