NMDC’s new steel plant to be operational in September

NMDC’s three million tonnes per annum (mtpa) greenfield steel plant at Nagarnar in Chhattisgarh is likely to be operational towards the end of September, after a delay of nearly seven years. The state-run company spent Rs 20,240 crore as of May this year for the plant and is likely to spend another Rs 1,700 crore as a mostly commissioning-related milestone payment. The project has seen a cost overrun of around Rs 7,000 crore.

Initially, it was estimated that the greenfield plant would require around Rs 15,525-crore investment and would go on stream by March 2015. However, various issues, including BHEL, commercial disputes with the contractors, delays in land acquisition for the slurry pipeline, and Covid-induced lockdowns among others, led to the delay in commissioning.

Greenfield steel unit of the size of Nagarnar is rare. excluding JSPL’s greenfield unit with a six mtpa capacity at Angul in Odisha, commissioned in 2017, no major greenfield steel unit has come up in recent times. Meanwhile, steel companies have raised their capacities, but those are mostly through the brownfield route and overcrowding of the existing facilities. India’s crude steel capacity currently stands at around 150 mtpa. Under the National Steel Policy 2017, the government realized it to go up to 300 mtpa.

The Nagarnar steel plant has around 2,180 acres of land, including 1,940 acres on which the plant is located. The capacity of the unit can be scaled up by another 2-3 mtpa in the next phase without requiring additional land. Apart from hot-rolled coils and auto-grade steels, the unit will produce various grades for producing API pipes, used in modern infrastructure and products for manufacturing LPG cylinders.

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