Xindia Steel to invest Rs 8,000 cr on iron &steel plant

Bangalore: Xindia Steel Ltd, a new joint venture between two Chinese steel and minerals companies and two Indian groups, on Wednesday announced that they would be investing over Rs 8,000 crore in two phases to set up iron pellatisation and steel plant in India.

Promoted by Xingxing Group of companies, Chinese National Metals Products, a part of the $19 billion China Minmetals Corporation along with its Indian partners, Kelachandra Group and Sigma Minmet Ltd, will produce two million tonnes (mt) of iron ore pellets in a plant to be set up in Koppal in north Karnataka. The Chinese investors will hold the controlling take of 55 per cent in the venture.

Xindia plans to expand the pelletisation capacity to six mt, while setting up a 5 mt capacity steel plant in the second phase.

Buys Hampi Steels

Addressing a press conference here, Mr Gopi Ramanathan, Director, Xindia Steel, said that the company had acquired Hampi Steels Ltd to initiate its project work. Hampi Steels had obtained approval from the Karnataka Government for producing steel, but had not started any work for over three years. Xindia acquired the company with its land asset of 300 acre for an undisclosed amount.

Mr Ramanathan said the production in the first phase would be starting in 13 months with initial investment of Rs 400 crore. Pellets would be supplied to Indian steel producers, he added. Xindia plans to invest Rs 8,335 crore in the second phase, after stabilising its initial venture.

He said the second phase would be taken up after acquiring land for producing six mt per annum of pellets. He, however, said the company has not decided whether the project would be located in the same area as it depends on where the Government allots land.

Mr Ramanathan said with a huge demand-supply gap in steel in the country, Xindia would be focusing on domestic market first. Mr Liu Mingzhong, Chairman of the $11-billion Xinxing Group, said, “This investment is in line with our strategy to be an active contributor to the merging Indian steel industry. The Indian infrastructure has seen acceleration in growth in recent years.”

With the Chinese low cost technology and Indian expertise, Xindia hopes to grow faster to emerge a key player in the steel sector, he said.