Tata Steel board greenlights domestic expansion, moves to secure iron ore

Tata Steel Ltd’s board of directors on Wednesday approved a series of expansion initiatives as part of its long-term India growth strategy.

The steelmaker said in a statement that it has received board approval for a capacity expansion of 4.8 million tonnes per annum (mtpa) at Neelachal Ispat Nigam Ltd, which will help the company further expand into long products.

Additionally, a hot rolling pickling and galvanizing line with a capacity of 0.7 mtpa will be established in Tarapur, Maharashtra, to meet the needs of the automotive industry. A third expansion is planned at Meeramandali to expand flat steel production; The company will add a 2.5 mtpa thin plate casting machine and rolling facility here. There is a capacity target of 40 mtpa by 2030.

raw materials

To secure raw materials, the company signed a memorandum of understanding with Lloyds Metals & Energy to explore mining opportunities in Maharashtra to increase production of iron ore, a key raw material. It will acquire 50.01% stake in Thriveni Pellets Pvt. Ltd (TPPL). Pellets are small, hardened balls made from iron ore and used in steel production.

“The termination of captive mines in FY 2030 under the MMDR Act will significantly increase Tata’s raw material costs by FY 2031,” analysts at Kotak Institutional Securities said in a Dec. 8 note.

Tata Steel said it would explore an opportunity with Lloyds to develop 6 million tonnes of steel capacity from scratch in two phases. Tata Steel meets 100% of its iron ore needs from affiliated mines.

The board also approved the setting up of a 1 mtpa demonstration plant at Jamshedpur, which will use low-grade ore, eliminate coke and include steel slag. The steel producer will begin engineering studies and regulatory processes for the facility.

The company said recent joint trials with a global steelmaker were progressing well. The steelmaker has been developing its low-carbon HIsarna technology, a process that uses low-grade ore, eliminates odor and incorporates steel slag, into a more sustainable method of steelmaking at its pilot plant in IJmuiden, the Netherlands, for a decade.

Tata Steel shares closed 0.8% higher on Wednesday. ₹While it was hovering at 162 on the National Stock Exchange, the benchmark Nifty closed down 0.3%.