Naveen Jindal-led Jindal Steel and Power (JSPL) plans to spend up to R15,000 crore in the next three years to add another 3.5 million tonne (mt) capacity at its Raigarh plant in Chhattisgarh, taking its annual production capacity to 6.5 mt.

?We would add 3.5 mt capacity in our first phase of expansion. The capex for this has been estimated at nearly R12,000-15,000 crore. By next year end, we will have all the approvals in place and another 24 months, the plant should be operational,? NA Ansari, whole time director and executive director, JSPL (Raigarh) told The Financial Express.

Under this expansion plan, JSPL ? a part of $15 billion diversified OP Jindal group ? will set up new blast furnace to produce mainly compact strip products (CSP). At present, the CSP technology allows production of hot roll coils (HRCs) with a thickness of less than even one millimetre.

Most of the steel makers use the conventional hot strip mill to roll out finished steel. In India, only JSW Ispat has the CSP mill. The company manufactures rail tracks, sheets and other structural products at present. Having a CSP mill would enhance its product portfolio.

Ansari said that though there were internal discussions were going on which technology the company should adopt for expansion, he said, ?most probably we will settle down for the new blast furnace and would produce CSPs.

?Our Angul steel plant is gas-based. Though, the blast furnace is conventional, we do not want to have same technology at all our plants. Therefore we would set up a new, larger blast furnace,? Ansari said.

JSPL?s produces 2,70,000 tonne steel at its Raigarh plant. The production was hit a little in August due to power supply issues. However, Ansari said, the production is back on track.

?We are producing even more. There is a mismatch between the demand and supply. We are definitely produce more than what we were producing but could not produce what we wanted to, that is because we have ambitious targets,? he said.

The company last week reported marginal decline in consolidated net profit to R891.80 crore for the quarter ended September 30, 2011 from R894.24 crore in the same period last year, due to increased expenditure on raw materials, interest outgo and one-time exceptional item.