Vedanta Ltd. is planning to invest between US$3 billion and US$4 billion to develop a new steel plant in Jharkhand, India, Live Mint reported Dec. 25.
The plant will have an annual capacity of 4.5 million tonnes, and will become part of the company's recently acquired Electrosteel Steels Ltd. at Bokaro.
Vedanta Resources PLC Chairman Anil Agarwal said it will be considered a brownfield investment as the new steel plant will be at the same location at Bokaro.
The Vedanta Resources subsidiary will initially spend about US$300 million to increase the capacity at Electrosteel to 2.5 million tonnes per annum, from 1.5 Mtpa.
Agarwal said the plan is to increase total capacity to 7 Mtpa. However, he did not provide a time frame for the development.
The decision comes a few months after an early August statement by CEO Kuldip Kaura, who said that Vedanta was opting against establishing a greenfield steel plant in Jharkhand as the Electrosteel acquisition would meet its strategic needs.
Agarwal said that the Electrosteel investment is part of the company's previously announced US$8 billion, three-year investment plan, The Hindu reported.
Vedanta revealed plans in late August to invest US$3 billion to US$4 billion in its zinc, lead, silver and aluminum businesses in the next two to three years, and the remainder in its oil business.
Agarwal added that the company was also interested in the Deocha Pachami coal block in the Indian state of West Bengal, and may bid for it when a government tender is floated.