After buying out the bankrupt Electrosteel, Vedanta is spending billions on a new steel plant in the Indian state of Jharkhand

(Image source- Reuters)

  • Fresh off its acquisition of Electrosteel Steels, Vedanta, a metals and mining behemoth, is moving ahead with plans to set up a steel plant in the Indian state of Jharkhand.
  • The company could spend as much as $4 billion on the facility, which is expected to have an annual production capacity of 4.5 million tonnes.
  • Electrosteel already has a steel facility in the Bokaro district of Jharkhand which boasts a production capacity of 1.5 million tonnes per annum. Vedanta plans to initially spend $300 million to boost this plant’s capacity to 2.5 million tonnes.
  • Vedanta’s new facility, which will be owned by its subsidiary Electrosteel, will also be based in Bokaro and will likely be adjacent to the existing facility.

Fresh off its acquisition of Electrosteel Steels, Vedanta, a metals and mining behemoth, is moving ahead with plans to set up a steel plant in the Indian state of Jharkhand. The company could spend as much as $4 billion on the facility, which is expected to have an annual production capacity of 4.5 million tonnes, according to media reports.

The move is part of Vedanta’s integration of its newly-acquired steel company. Electrosteel already has a steel facility in the Bokaro district of Jharkhand that boasts a production capacity of 1.5 million tonnes per annum. Vedanta plans to initially spend $300 million to boost this plant’s capacity to 2.5 million tonnes.

Vedanta’s new facility, which will be owned by its subsidiary Electrosteel, will also be based in Bokaro and will likely be adjacent to the existing facility. Hence, the combined annual capacity of both facilities will be seven million tonnes.

The company will likely receive the support of the state and central governments with regards to land acquisitions and the fast-tracking of approvals. The Indian government plans to increase the country’s steel output to 300 million tonnes by 2030, more than double the total production in 2017-2018.

Anil Agarwal, the founder and chairman of Vedanta, said that the Bokaro investment would result in the creation of around 120,000 jobs, half of which involve direct employment. The operation of the new plant is expected to commence in three to four years.

Vedanta successfully bid for the bankrupt Electrosteel Steels Ltd in April this year, making it one of the first resolutions under India’s new Insolvency and Bankruptcy Code. The ₹53.2 billion acquisition proposal dovetailed with the mining company’s plan to expand its manufacturing presence in the steel industry.

Vedanta had also bid for the bankrupt Essar Steel, but was beaten by ArcelorMittal, the world’s largest steelmaker, which submitted an offer of ₹420 billion. While the resolution seems to be mired in a number of legal proceedings, ArcelorMittal is banking on the acquisition to help return it to a competitive position in the Indian steel industry. Essar Steel has a facility in Gujarat that is capable of manufacturing 10 million tonnes a year, making it the largest such plant in India.


SEE ALSO:

India’s steel industry is set for a shakeup after ArcelorMittal finally emerges as the winning bidder for Essar Steel

ArcelorMittal submits a higher bid for bankrupt Essar Steel but on one condition
{{}}
Add Comment()

Comments ()

X
Sort By:
Be the first one to comment.
We have sent you a verification email. This comment will be published once verification is done.