India hopes to set up steel plant in Mongolia

NEW DELHI: Aiming to spread its wings beyond the country's border, Steel Authority of India (SAIL) will set up a three mtpa plant in Mongolia with around Rs 15,000 crore investment, provided that Asian nation ensures linkages to raw materials to feed the proposed facility.

"Talks are on in this regard. If the Mongolian government provides us raw material linkages and land, we will put up a three million tonnes per annum (mtpa) plant in that country to cater to the need of the land," SAIL Chairman C S Verma told PTI today.

Verma said Mongolia, bordered by Russia in the north and China in the south, east and west, has enough coking coal and iron ore deposits to fuel the proposed steel plant for which around Rs 15,000 crore investment would be required.

"Mongolia is a growing economy and its current steel need is around 3 mtpa. So, when the proposed plant comes up, it will help the country to meet its entire requirement from domestic sources," he said.

The industry sector contributes more than one-fifth of the economy of Mongolia, the 19th largest country in the world.

The mining sector of the country is witnessing high growth with already a number of Chinese, Russian and Canadian firms operating in that space.

SAIL has already sent a delegation to Mongolia to assess the potential for the proposed plant and if everything falls in place, an agreement in this regard might be signed within the next six months.

"It might take two and a half years for the plant to go on steam after the signing of the formal agreement," Verma said.

Apart from Mongolia, SAIL is also in advanced stage of discussion with the Indonesian government to set up a similar facility.

However, that will also depend upon the ensured raw material linkages by the government of Indonesia.

The Maharatna company has already embarked a Rs 70,000 crore capacity expansion plan, including Rs 10,000 crore for mine development, to enhance capacity to 23.46 mtpa from 14.35 mtpa domestically now.

SAIL has plans to increase its steel making capacity further to 60 mtpa by 2020.

Source:economictimes.indiatimes.com