Essar group is making a comeback to the steel sector. The company announced its footprint in three mega projects with an investment of USD 8 billion over three to four years, according to a report by the Business Standard.
The three projects are situated in Saudi Arabia, USA and India. Essar Group plans to open a steel plant in Saudi Arabia, and an iron pellet plant each in Odisha and Minnesota, US.
Previously the Essar Group in its first innings in the steel business, sold its asset Essar Steel to steel magnate L N Mittal for Rs 42,000 crore in 2019. The group now has a substantially lighter balance sheet after repaying Rs 2 lakh crore of its debt according to a report by Moneycontrol.
"We have completed what is certainly one of the biggest, if not the biggest, deleveraging exercise by repaying Rs 2 lakh crore of loans over the last three years," Prashant Ruia, director, Essar Capital Ltd said on the sidelines of the India Energy Week.
Also Read: Essar embarks on new phase of growth, to invest in across energy, steel and mining sectors
The conglomerate also joined a list of five shortlisted bidders for National Mineral Development Corporation, a public sector firm set up for disinvestment. The company is also constructing a steel plant with a capacity of 3 million tonnes (mt) a year according to the report.
Also Read: Essar to invest $3.6 billion in energy transition in UK, India
Steel industry veterans from top public-sector firms have been hired, including names such as Anil Kumar Chaudhury the former chairman of Steel Authority of India (SAIL). Chaudhary has been hired as chief executive officer, Amit Sen, who was formerly the finance director in SAIL, has been hiredf as president (finance). The operation is being helmed by steel-stalwart Jatinder Mehra as the vice-chairman, according to the report.
Also Read: Essar Oil & Gas reports record profit, revenue in Q3
Here's a list of Essar's latest investment projects in the steel sector to be undertaken this year.
Saudi Arabia
Essar Group's project in Saudi Arabia will have an investment of $4 billion. The project is slated to have a capacity of 4 million tonnes(mt) a year for casting and hot-strip steel as well as 1 mt capacity of cold-roll coil steel and tin-plate. The project will be located in Ras Al Khair City. The project will include two direct reduced iron plants with a 2-million-tonne per annum (mtpa) capacity. The company expects to start work by the end of the year and complete the plant in 36 months.
Odisha
Essar Group's company Essar Minnet will invest Rs 12,000 crore ($1.46 billion) to set up an iron ore pellet complex at Keonjhar, Odisha. The plant will have a capacity of 14-mt. Additionally a slurry line of 245 km from Keonjhar to Paradip will also be built in the port city. The report cited sources in the company and said the project is expected to commence production in 30 months.
Minnesota
Essar Group's Minnesota project will operate in the name Mesabi Mettalics, the group has invested $1.5 billion of the proposed $2.5 billion in this project. Mesabi Mettalics is being set-up to mine 7 million tonnes of taconite per year and build a reduction grade pellet project.
The group's Minnesota project is half complete and is one of the largest investments in the area.
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