India’s southern state of Andhra Pradesh has selected Essar Steel or ArcelorMittal Nippon Steel India (AM/NS India) as a joint venture partner to establish a steel plant in Kadapa. The plant will have an installed capacity to produce 3mn mt high-grade steel.
Earlier, the project was to be developed in partnership with Liberty steel’s Indian subsidiary after it was selected through a bidding process that started in January. The state government has allotted land for the project under a Special Purpose Vehicle (SPV) YSR Steel Corporation. But the recent financial crisis at Liberty steel led the government to review the bid and select the next qualifying bidder AM/NS as a JV partner, reported local media quoting the state’s Information Minister.
Iron ore supply for the steel plant is ensured through an agreement with India’s leading miner NMDC Limited, which will supply about 4.5mn mt of ore, annually.
The estimated capex for the project is Rs110,000mn ($1,487.5mn). The government has approved funds of Rs14,480mn for the development of infrastructure at the Krishnapatnam Port and connecting it with the metro city Chennai and for the development of highway from Vizag to a greenfield airport planned at Bhogapuram.