Scale the great wall

Calcutta, Sept. 2: The Jindals are in the hunt for contractors from China for its upcoming steel plant in the state.

A team, led by the chief executive of the Bengal project, Biswadip Gupta, will go to China to find a partner for taking up the engineering, procurement and construction (EPC) job.

Sajjan Jindal’s JSW Steel will set up a 10-million-tonne steel plant along with infrastructure at an investment of Rs 35,000 crore.

In the first phase, a 3-million-tonne plant will be set up at Salboni near Kharagpur. Investments in the first phase are estimated at Rs 10,000 crore.

China accounts for 34 per cent of global steel production. The Jindals, therefore, are banking on Chinese EPC contractors.

Moreover, the plant will produce steel from iron ore fines — a model perfected by Chinese companies, since the country lacks good quality iron ore lumps.

China is also the biggest buyer of India’s iron fines, which have low ferrous content.

JSW Steel is the only Indian company to set up such a large project without depending on a lease for iron ore mines. It plans to buy fines from Orissa and Jharkhand.

Russia, the US and Germany have so far played important roles in developing the Indian steel industry. However, many small plants are now interested in using fines and Chinese expertise in steel making.

The Jindals plan to acquire land from the state government by October and private land by the end of this year.

JSW plans to soon start working on the design of the plant. It wants to begin actual groundwork by December.

The company is also planning to set up a private berth at the Haldia port to import coking coal and export semi-finished products.

It has asked Calcutta Port Trust to approve the project.

A dedicated berth is a key element in the operations of the Bengal unit, which is expected to supply primary steel to its recently acquired pipe and plate mill in the US.

Sources said that vis-à-vis US plans Jindal Steel was following Tata Steel’s strategy.

JSW Steel will send low-cost slabs, to be manufactured by its plant at Vijaynagar, Karnataka and at Salboni, for value addition to the US

The steel plant in the state is expected to become operational by 2010-11.