January 16, 2008 -- Non-ferrous metals giant Vedanta Resources is planning to enter the Indian steel sector with a 5 million tonne plant at an investment of about Rs 240 billion (US$6.1 billion) in Keonjhar district of Orissa and envisaging its commissioning by 2012-13.

"We are impressed at the growing consumption of steel in India and are keen to enter its steel sector. We are planning to build a 5 million tonne steel plant at Keonjhar district of Orissa. If we find a suitable partner, we should be able to commission it by 2012-13 at an investment of about Rs 240 billion," company sources said.

Vedanta, which is the holding company of Sterlite Industries (BSE:500900) has proposed to form a company - Sterlite Iron and Steel Company - for the project. Apart from the plant, the project would involve developing iron ore mines. The company would be a joint venture between the Vedanta group and Volcan Investments, Vedanta's holding company. The project is estimated to generate more than 7,000 jobs.

The project would be a fully integrated one and its produce would range from hot rolled and cold rolled coils to long products. M N Dastur and Company has been entrusted to prepare the feasibility report of the project.

For 5 MT plant, the company would require 500 million tonne of iron ore reserve, for which it is expected to apply for the necessary mining lease.

Meanwhile, Vedanta has began trial run of its Rs 35 billion alumina plant at Lanjigarh in Orissa but is yet to ensure adequate bauxite linkage for its different projects.

"We envisage being number one producer of aluminium next year in the country," Vedanta Head Business Development C V Krishnan told reporters at Lanjigarh.

Source: Asia Pulse