Work on Jai Balaji's steel plant to start by year-end

Kolkata: The Rs 464-crore Jai Balaji Industries is to start work on the integrated steel plant at Raghunathpur in Purulia district of West Bengal towards the end of this year.

In the first phase, the company will set up a 2-million tonne (mt) steel plant, a 400-MW coal-based captive power plant and a 1 mt cement plant using fly-ash to be produced by the captive power unit at a cost of Rs 16,000 crore.

The Chairman and Managing Director of the company, Mr Aditya Jajodia, said the West Bengal Industrial Development Corporation was expected to complete by November the acquisition of 1,200 acres to be required in the first phase.

The acquisition of approximately 700 acres was already over. He estimated the cost of acquiring 1,200 acres at Rs 50 crore.

Purulia being one of the backward districts, with a low percentage of agricultural land compared to the rest of Bengal, the company did not foresee much trouble over land acquisition, he said.

In the second phase, steel manufacturing capacity would be expanded to 5 mt and the cement and captive power capacities too would be gradually ramped up to 3 mt and 1,215 MW respectively.

Interestingly, the Jai Balaji Group has settled for the power-intensive electric arc furnace route instead of the traditional blast furnace route for steel making.

“We have settled for the electric arc furnace route to reduce dependence on coking coal which is not available in India in addition to it being subject to volatile price regime whereas the country has adequate reserves of thermal coal,” Mr Jajodia said.

The company would be requiring approximately 2-2.5 mt of coking coal for 5 mt of steel production, approximately one third of the requirement in the blast furnace route.

On the options to finance the project, he indicated that in addition to loan finance, the promoters might dilute five per cent stake in the company over a period of two and a half years to part-finance the project.

The promoters currently hold 63.93 per cent in the company.