Essar Steel in on expansion spree.
Within weeks of announcing a four million tonne steel plant in Orissa, the group has drawn up plans to set up a 3.5 million tonne plant in Chhattisgarh at an investment of up to Rs 4,000 crore (Rs 40 billion).
Essar Global, an arm of Ruia's Essar Group, will sign the memorandum of understanding with the Chhattisgarh government on Tuesday, company sources said.
The plant would be set up in Bastar district in two phases of 1.6 million tonne each and the final project proposal would be submitted to the Raman Singh government within three months of the signing of the MoU, sources said.
The company has been assured of full quantity of iron ore from the Bastar region known for its quality iron ore, they said.
According to sources, the project would be put on the fast-track and the state government has assured that it would be dealt on a priority basis.
It may be recalled that Tata Steel had already clinched a deal with the Chhattisgarh government for setting up a 5 MT integrated greenfield steel plant in the state.
Essar has a 3.3 million tonne steel plant in Hazira, where the capacity would be expanded to 4.5 million tonnes by next year.
The state government gave the go-ahead for the Essar project following a high-level meeting between the Chief Minister Raman Singh and top officials of the Bastar development authority on Saturday last.
The government said it did apprehend any threat to the project from Maoist guerrillas, saying the projects would not only expedite socio-economic development of Bastar but also generate employment opportunity for the locals.
The state government is reported to have chalked out a comprehensive plant to rehabilitate the tribals, who would lose their land dus to the construction of both the steel plants.
Tata Steel has already announced that it would recruit 80 per cent staff from among the locals for its plant while only experienced and technical hands would be brought from outside.
