SAIL plans new mill in ore battle
Sees 10 million tonne plant giving it an upper hand over ArcelorMittal and Tata in battle for control of one billion tonnes Chiria deposits

Seeking edge
Jharkhand, Orissa and Chhattisgarh hold 55% of India's iron ore reserves, the main steelmaking ingredient
The region has attracted investment proposals from more than 200 local and overseas steelmakers, according to steel ministry data
India's steel demand will probably grow by as much as 10% in the year ending March 31, according to the steel ministry
Debarati Roy
Mumbai

Steel Authority of India Ltd (SAIL), the nation's biggest state-run producer, plans to build a 10 million metric tonne steel mill in expectation of beating ArcelorMittal for the rights to control the nation's biggest iron ore reserves.
Sites for a plant to exploit the Chiria deposit in Jharkhand are being shortlisted, chairman S K Roongta said, without specifying the cost or timeframe.
SAIL, which won back the right to half of the 2 billion tonnes deposit last month, is battling ArcelorMittal, Tata Steel and JSW Steel for control of the rest of Chiria.
The deposit, with iron content of as much as 65%, according to the steel ministry, was stripped from a Steel Authority unit in 2005 because it hadn't developed the block.
"Anyone who wants to put up a large sized plant is looking for a big deposit instead of fragmented ones," said A S Firoz, an independent steel analyst and former chief economist at the Union steel ministry. "Chiria is attractive as its one of the few large deposits available in Jharkhand."
Luxembourg-based ArcelorMittal, which plans to invest $20 billion to set up two 12 million tonne steel plants in India, is vying with SAIL to win the Chiria rights for its planned Jharkhand plant, Vijay Kumar Bhatnagar, head of the Indian unit of ArcleorMittal, said.
Jharkhand, Orissa and Chhattisgarh hold 55% of India's iron ore reserves, the main steelmaking ingredient. The region has attracted investment proposals from more than 200 local and overseas steelmakers, according to steel ministry data.
SAIL has hired Mecon Ltd to prepare a detailed project report, Roongta said. Every 1 million tonnes of capacity may cost as much Rs 400 crore, he said.
India's steel demand will probably grow by as much as 10% in the year ending March 31, according to the steel ministry.
SAIL, whose sales rose 30% last month from a year ago because of car and construction demand, is increasing capacity at its existing plants to increase output to 23.46 million tonnes from 14 million tonnes by March 2012.
The company has received government approval to sell shares equivalent to 10% of its existing capital and will use the proceeds to fund expansion, according to a statement last month. Another 10% of the company will be sold in two stages from the government's 86 percent holding, it said. The company has borrowed 36 billion rupees this financial year and will raise an additional Rs 1,400 crore by March 31. Bloomberg

Tag: STEEL, MILLION, SAIL, STEEL MINISTRY, MINISTRY, TONNES, PLANT, INDIA S, IRON, YEAR, DEPOSIT, JHARKHAND, ARCELORMITTAL, BILLION, CHIRIA, IRON ORE RESERVES, MILLION TONNES, MARCH 31, IRON ORE, FINANCIAL,