MSPL's Rs 2,200 crore steel plant in Hospet operational by fiscal'09

Mumbai, Sep 22 (UNI) The 2,200 crore steel plant of MSPL Ltd, a Hospet-based mining and iron exporting company, will be ready for operations in 2009, its Executive Director Shrenik Baldota here today said.

Mr Baldota said the plant will have a capacity to produce 1.2 million tonnes of iron pellet and 1.05 million tonnes of steel per annum and gradually plans to scale up its capacity to five million tonnes in five years.

''MSPL and the steel company would be two different entities. We may not even use our own ore. We may approach other ore extraction companies for raw material to our steel plant. We are against steel companies having their own iron-ore mines,'' Mr Baldota said.

The company proposes to fund the steel plant through internal accruals and IPO (initial public offering). It has already filed a draft redherring prospectus with the market regulator SEBI. ''We will float the issue at an appropriate time, when the market is ripe for it'' he said.

Commenting on the issues plaguing the iron ore exports sector, Mr Baldota said, ''Instead of evaluating the Hoda Committee Report, the Indian Steel Alliance (ISA) has held two subjects close to its heart 'captive mines for steel plants and ban on export of iron ore'.'' He charged that ISA has unleashed a misinformation campaign stating that iron ore resources would last only 20 to 30 years. ''Their call that the Supreme Court has banned mining of magnetite resources is not true.'' On the contrary, he pointed out that iron ore resources are growing in the country.

Substantiating the above, MSPL Chairman N K Baldota said, ''More reserves have been discovered with intensive mining and exploration.

Iron ore resources in India will last for 110 years even if steel production touches 110 MT by 2020. He pooh-poohed the claims of the ISA saying that the sector is growing by leaps and bounds.'' Giving a macro picture, the MSPL Chairman said the surge in demand for ore products in China has bolstered the export figures of the iron ore sector in India. ''The sector has witnessed a near-300 per cent growth in the last five years.'' In the case of steel, he continued, that it is only a ''meagre 7.4 per cent.'' According to him, ''Steel manufacturing companies are not interested in using iron ore 'fines' (fragmented ores) for steel making because it is a lengthy process. They only use 'lump' ores for making steel. Steel companies having their own mines have stock-piled tonnes of fines in their mines. This may create environmental hazards and pollute rivers and affect agriculture fields,'' Mr Baldota said.

The MSPL officials also commented on the inefficiency on the part of steel manufacturing concerns to increase steel production in the country. ''Steel companies are advocating a ban on iron-ore exports to strangulate this sector. This will paralyse the sector making them easy buy-out targets for these companies. We request the government to stop leasing out mines to steel plants,'' Mr Baldota added.

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