Wednesday, 2 April 2014

Mesco Steel looking to expand capacity to 3.5 MT

-based Mideast Integrated Steel Ltd is planning to treble its capacity to 3.5 million tonnes in the state with an investment of about Rs 8,000 crore, a top company official said. 

The company, also known as Mesco Steel, has a hot metal production capacity of about 1.2 MT, through which it makes pig iron. 

"3.5 MT capacity includes existing 1.2 MT capacity. It will take 3-4 years, we will go step by step. We already have land. We are moving for environment clearance and have submitted all the papers," Mesco's chairperson and managing director Rita Singh said on the sidelines of an  event. 

She said the company will expand its capacity in two phases and the company has secured approvals for the first phase, which will increase the capacity to 2.25 MT. 

"That will require about Rs 7,000-8,000 crore (investment). That will be funded through debt for machinery and some other debt to be raised. So we can go to 2.25 MT first and then to 3.5 MT," she said. 

However, debt for the capacity expansion will be raised only after securing all clearances and in the meantime, the company will go with approved projects like installing 1.5 MT capacity coke oven battery, she said. 

The steel plant of Mesco is located on about 540 acres and has 2 blast furnaces supported by commensurate raw material handling system, power plant and other essential services. Post expansion, the company will be producing wire rods and rebars. 

It also has 2 iron ore mines in the state -- Roida and Malangtoli, one coking coal mine and limestone and dolomite mines in Madhya Pradesh. 

Of its mines, Roida is a producing iron ore mine having 4 MTPA capacity. The mine was among those, which were found to have obtained delayed environment clearance and continued production in the intervening period by the Justice M B Shah Commission on illegal mining in Odisha. 

The Commission has recommended to recover over Rs 2,221 crore from Mesco steel after a show cause notice was sent by the Odisha government. 

However, Singh refuted the charges and said that "they (the Commission) are questioning everybody... That is the kind of money you can not earn out of mining. We have not done anything wrong". 

She further said that "there was small minor extra production without environment clearance and it was condoned by the Environment Ministry. I have got a letter from the ministry. We had applied 7 years before and generally the law is that when you have applied for it, it is deemed done". 

The company consumes part of iron ore from the mine at its pig iron plant and sells rest of the quantity in open market.

Sandip Ginodia , Director
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1 comment:

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