The Indian government has informed the government of the central Indian state of Chhattisgarh that Indian state-owned steel producer Steel Authority of India Limited (SAIL) will not be able to provide funds to set up the proposed Ultra Mega Steel Plant in the Dantewada district in the state, a government official said on Monday, March 19.
The official said that, considering that SAIL will need to focus on its just completed modernization of its plants and to consolidate its financial turnaround, a fresh fund infusion into the proposed steel mill in Chhattisgarh will not be possible.
Last year, SAIL along with iron ore miner, NMDC Limited, Chhattisgarh government and India’s Ministry of Steel signed a memorandum of understanding to float a Special Purpose Vehicle (SPV) to construct a greenfield large capacity steel mill as part of the Indian government’s program to ramp up domestic steel capacity to 300 million mt per year by 2030, the official said.
However, it is not yet clear whether SAIL will participate in the proposed steel mill project in Chhattisgarh in a purely management capacity without funding or equity participation in the SPV, the official added.