India aims for steel capacity jump.

India aims for steel capacity jump. India will expand its steel production capacity by around 15%, or 12 million metric tons, this fiscal year to meet rising demand from infrastructure and automobile sectors, federal Steel Secretary P.K. Misra said. The additional capacity will mainly come from expansion at the existing plants of state-run Steel Authority of India Ltd. and Rashtriya Ispat Nigam Ltd. as well as private-sector companies Essar Steel Ltd. and Bhushan Steel Ltd. he said in an interview. "Demand for steel is buoyant. It is expected to grow by at least 10% this fiscal year on robust consumption," Mr. Misra said. He added that local prices are likely to remain steady over the next two to three months because of higher supply and an expected fall in input costs. India, the world's fifth-largest steelmaker, added 8 million tons of production capacity in the fiscal year through March, taking the total installed capacity to around 80 million tons of crude steel. Several Indian and foreign companies, including ArcelorMittal and South Korea's POSCO, plan to set up steel plants in India to tap growing demand. Most of the new steel projects have been delayed by protests over displacements of local residents and red tapism over providing raw material linkages, although the expansion of existing steel plants of Indian mills have progressed smoothly. Mr. Misra expects production from some greenfield projects to start in a couple of years, which will raise the country's production capacity to 130 million tons by 2015-16. India, desperate for coking coal supplies, is hopeful a consortium of five state-run companies will be able to clinch their first deals for securing the vital steelmaking material overseas in 2011-12, the steel secretary said. India meets most of its coking coal requirements from imports. The consortium, International Coal Ventures Pvt., has been on the lookout for coal assets abroad since it was formed two years ago, but hasn't been able to strike a deal until date. "We expect ICVL to sign two to three deals," he said. The consortium was scouting for assets in Indonesia, Australia, Mozambique and the U.S., he added. ICVL has already signed an initial pact for coal supplies with the Indonesian government and, separately, is close to buying a 24% stake in Singapore-headquartered MEC Coal, which has two coal mines in Indonesia. The steel secretary said the expected initial share sale in state-run Rashtriya Ispat Nigam Ltd. has to happen within two years to meet a government rule, but that the exact timing is yet to be decided. RINL aims to double its steel production capacity to 6.3 million tons by December 2012 with an investment of 125 billion rupees ($2.8 billion) and ranks among the top five Indian steel producers. Mr. Misra said the steel ministry isn't in favor of an initial share sale of steel consultancy MECON Ltd. as the state-run company has just come out of losses, although there were media reports suggesting a possible share sale. Most steel companies consult MECON for their projects in the country. Meanwhile, the planned follow-on share sale of the country's largest steel producer, Steel Authority of India, is on track, Mr. Misra said. "The stock market conditions are good. We will like to capitalize on it," he said, as a hint that the share sale could be soon. The government plans to sell a 10% stake in SAIL, while the company will issue an additional 10% of the expanded equity base. The sale will likely raise as much as 160 billion rupees to 180 billion rupees, according to an initial government estimate. Mr. Misra also said SAIL is in talks with POSCO to finalize the product mix and technology for a proposed joint venture 1.5-million-ton capacity steel plant in eastern state of Jharkhand.