Vedanta acquired the inoperative Bellary Steel in Karnataka through competitive bidding in 2011 and Electrosteel Steels (ESL) via the insolvency route in 2018. The company’s iron and steel vertical includes steel operations, iron ore mines in Goa, Karnataka and Odisha, apart from a ferro-alloys producing unit; a nickel, cobalt and cement unit; and a pig iron, metallurgical coke & port business. Sauvick Mazumdar, CEO, Vedanta Iron & Steel, shares with Surya Sarathi Ray the plans ahead. Edited excerpts:
What is the plan for expansion in ESL?
Currently, we have around 1.5 million tonne per annum capacity at ESL and are working to take it to 3 mtpa with around Rs 4,000-crore investment. The expansion will be through the brownfield route. We are getting the requisite clearances and I believe in the next 9-10 months, this entire capacity addition will take place. The blueprint is also ready for taking the capacity further to 5 mtpa. It will require another Rs 8,000-9,000 crore.
What kind of product basket do you have now in the steel business?
Our product basket includes TMT bar, wire rod and ductile iron pipe in the steel segment. We are in the process of doubling the entire product basket. However, as we go forward, we will also get into the flat and special alloys segment. All the thinking is going on.
And, in Bellary?
We have got over 1,000 acres of land in Bellary. We are very actively considering that expansion. We will produce green steel there. We are toying with various ideas as to whether we will go for a tie-up. But it’s too early to say anything. At this point, I won’t be able to say much on the proposed capacity there. But we have been talking about having around 3-4 mtpa over there.
What is stopping you from executing the plan at Bellary? When is the ground work likely to start?
Nothing is stopping us…we are on the drawing board. I don’t think it’ll be good for me to comment on a timeline for that.
Will you be looking for tie-ups in both Bellary and ESL?
We are not against any sort of idea, but as of now there aren’t any.
The government has projected 300 mtpa capacity by 2030-31. What kind of capacity will Vedanta be looking at by then?
Right now, we are producing around 2.5 mtpa. Apart from 1.5 mtpa in ESL, we are producing around 1 mtpa of very high-quality pig iron in Goa. Very soon, we’ll also produce ductile iron pipe from Goa. By 2030, we’ll be coming up with Bellary and further expansion with ESL. So, in the next 6-7 years, we expect our expansion to be a minimum of 10-12 mtpa.
How do you feel about demand in the steel sector?
If you see in the current context, things are not picking up as one would like them. Per capita steel consumption in India is currently around 75 kg against the world average of around 228 kg. In China, it is around 691 kg. And, if we look at stainless steel, India’s per capita consumption is 2.5 kg against the world average of around 6-7 kg and China’s 16-17 kg. For a country of India’s size to develop, whether it is steel or stainless steel, this has to go up.
Are you planning to enter the stainless steel sector?
At Vedanta, we are producing everything that is required to make steel or stainless steel. We are producing iron ore, steel, metallurgical coke, ferro-chrome and soon we are also going to produce nickel. For stainless steel two ingredients are very important, ferro-chrome and nickel. However, I would not be able to comment on entering into stainless steel sector now. Let us see how things unfold. I believe if India has to grow, more and more steel and stainless steel India has to produce.
Apart from catering to the domestic market, will exports be an option?
Yes, that is always there. But I see it differently. Even in India, with a little bit of accelerated growth, there is and there will be enough demand going forward.
What is the prospect of reopening of Goa mines? Will it happen or is it dead?
I don’t consider it dead but it all depends on what the government feels. The state government has written several times to the Centre for amendment in the Act after which the mines can be reopened immediately. It’s a huge legal battle. There are cases running in the Supreme Court since 1987. What needs to be done is a small amendment in an Act. That would be the best and easiest way. I’m sure the Centre is also thinking something on the same lines, as 25% of Goa’s population is directly or indirectly dependent on mining. We are all hopeful. An industry that has existed for over 80 years cannot just die.