The Andhra Pradesh government has picked Essar Group to be the new joint venture partner for the prospective YSR Steel plant in Kadapa, according to Indian press reports. This comes after authorities dropped previous pick Liberty Steel due to its renowned financial troubles.
The move would represent Essar Group’s return to the steel business after it was forced to relinquish its circa 10 million tonnes/year capacity flat steelmaking operation to ArcelorMittal following protracted bankruptcy proceedings (see Kallanish passim). Essar representatives did not respond to a request from Kallanish for comment on Wednesday.
The prospective plant will eventually have a 3 million tonnes/year capacity of steel. Authorities have proposed the joint venture will commission 1m t/y of capacity in the first stage by March 2024. The joint venture partner was to be required to hold at least 51% of the new plant’s subscribed and paid-up equity share capital.
YSR has already agreed to procure 5m t/y of iron ore feedstock from NMDC, but the JV partner would be allowed to source from elsewhere if beneficial to the plant.
Adam Smith Germany