JSW Steel plans to set up a metal recyling plant at Pen in Raigad district of Maharashtra in joint venture with New Zealand’s metal recycler National Steel Holdings at an investment of ₹175 crore.

The Group’s flagship JSW Steel has acquired a land parcel spread over 30.5 acres in Pen, about 4 km away from its existing 10 million tonne per annum (mtpa) integrated steel plant at Dolvi. The company has purchased the land parcel for ₹23 crore.

In August, the company had entered into 50:50 joint venture with National Steel Holdings to set up scrap shredding plants using industry-leading machinery, technical know-how and relevant processes.

Will replicate model

Seshagiri Rao, Joint Managing Director, JSW Steel said the project will be completed in 12-18 months after completion of land acquisition which should take about one-two months. The steel recycled will be used in the steel manufacturing plant at the Dolvi plant, he said. Once this project is competed, the joint venture company will replicate it at other steel plants of the company, he added.

JSW Steel competitor Tata Steel commissioned its first steel recycling plant last year in Rohtak, Haryana, with Aarti Green Tech on a build-own-operate partnership. It now plans to set up small recycling plants across the country. 

Rao said that the joint venture partner has all the know-how on processing scrap and it will come in hand while setting up the project.

In a bid to reduce dependence on imported scrap for processing, the government launched the national vehicle scrapping policy in August last year, with the objective to phase out unfit and polluting vehicles, which will feed domestic scrap metal processing companies.

Source of scrap

The automobile industry is a key source for generating scrap for the steel industry. The vehicle scrapping policy makes it mandatory for owners to scrap the vehicle after its life time. Once this policy is enforced strictly, owners have to pay huge fees for using vehicles beyond their life time.

Though scrap is the main raw material for secondary sector, primary steel producers also use the metal scrap in the charge mix of BOF (basic oxygen furnace) to the tune of 15 per cent to improve efficiency, minimise cost of production and other process needs. The availability of raw materials at competitive rates is imperative for growth of the steel industry and to achieve NSP-2017 target of setting up 300 mtpa capacity.