Tata Steel will continue to allocate around ₹10,000 crore a year for capital expenditure to expand its production capacity to 40 million tons per annum (mtpa) by 2030, N Chandrasekaran, chairman of Tata Sons Limited said at Tata Steel’s annual general meeting on Monday.
“The company is continuing to invest in capacity expansion as well as transformation towards new steelmaking to reduce carbon emissions,” Chandrasekaran told shareholders. Tata Steel, he said, would continue to deploy strategies for the expansion plan and use the right technologies to make progress on decarbonisation.
The company is in the process of expanding the Kalinganagar plant from 3 mtpa to 8 mtpa. “The company plans to increase the Kalinganagar capacity by an additional 5mt under the third phase to reach 13mtpa. NINL, an acquired subsidiary and part of the Kalinganagar ecosystem, will also be expanded from the current 1 mtpa to 5.5 mtpa in the coming years,” he added.
Tata Steel’s 0.75 mtpa scrap-based low-carbon electric-arc furnace in Ludhiana is expected to be commissioned by 2026, helping it increase its long product portfolio. The company plans to complete its expansion over the next 8 to 10 years while continuing to pare down its debt every year with excess cash flows at the operating level. It aims to keep the debt-to-Ebitda ratio below 3.
‘Will continue to transform International sites’
Chandrasekaran also said the company would continue to focus on transforming its international sites, with the second blast furnace in the UK likely to shut down by September over safety concerns. The plants will be replaced with electric-arc furnaces of an equivalent capacity through a £1.25 billion investment in collaboration with the UK government. He said the change in government in the UK has not affected the ongoing discussions regarding Tata Steel UK. The company’s UK plant has been under the spotlight with its heavy-end assets nearing the end of their life, resulting in unsustainable financial losses.
The company is also in talks with the Dutch government on financial and policy support for a major decarbonisation plan to replace one of the two BFs with hydrogen-based direct reduction of iron (DRI) technology.