ArcelorMittal, Nippon Steel to set up Rs 1.4 lakh crore steel project in Andhra Pradesh

AM/NS India, a joint venture between ArcelorMittal and Nippon Steel, is set to launch a massive steel project in Andhra Pradesh. This integrated steel project, with a capacity of 17.8 million tonnes, will involve a total investment of Rs 1.4 lakh crore and will be completed in two phases.

Project Details

The project will be located in the Anakapalli district and is one of the largest greenfield projects in recent times. In the first phase, AM/NS India will set up a 7.3 million metric tonnes per annum (MMTPA) capacity blast furnace steel plant with an initial investment of Rs 80,000 crore, requiring 2,600 acres of land. For the second phase, they will add another 10.5 MMTPA capacity with an investment of Rs 60,000 crore, seeking an additional 2,000 acres. The government has identified 1,800 acres of available land adjacent to the Nakkapalli bulk drug park.

Manoranjan Kumar, Chief of Ports Operations and Development at AM/NS, emphasized the importance of coastal locations and port facilities for the project. “We plan to have a steel manufacturing capacity of 40 MMTPA by 2035. As part of this expansion plan, we were looking for coastal locations in Andhra Pradesh and Odisha. The key issues in setting up a steel project are the availability of land and port facilities. Nakkapalli fulfills both the criteria,” he said.

Captive Jetty Requirement

A critical requirement for the project is a captive jetty, which facilitates global raw material sourcing at competitive prices. Kumar highlighted the strategic advantage of the Nakkapalli site for this purpose.

Government Collaboration

The project was finalized during a Zoom call in July between Andhra Pradesh IT Minister Nara Lokesh and ArcelorMittal CEO Aditya Mittal. Lokesh initiated the dialogue with AM/NS India's team to understand their requirements, leading to further discussions and a concluding call between the Chief Minister and Lakshmi Mittal.

Environmental Considerations and Land Acquisition

The first phase of the project is set to commence with the laying of the foundation stone in January 2025. The company needs to secure environmental clearance, necessitating the availability of land. Approximately 1,800 acres are ready to be handed over immediately.

Kumar also noted that land acquisition remains a significant challenge, as 33% of the land must be reserved as a green belt to meet environmental norms. “AM/NS is committed to meet the best of environmental norms. This necessarily means ISP will need more land,” he added.

Future Expansion Plans

AM/NS India aims to increase its capacity at Hazira (Gujarat) from 9.6 MMTPA to 15 MMTPA and establish a greenfield project at Paradip in Odisha with a capacity of around 9-10 MMTPA in the next five years. The new project in Andhra Pradesh is a crucial step toward achieving the 40 MMTPA target.

The integrated steel plant will use sustainable green steel technologies and feature a value-added complex, intending to substitute imports. It will produce a range of flat steel products, including high-end value-added steel for the automotive sector. “The concept essentially is that downstream industries, manufacturing high-end value-added products, should be housed closer to the ISP,” said Kumar.

AM/NS India began its journey by acquiring Essar Steel in 2019 through the NCLT process for Rs 42,000 crore. In November 2022, they completed the acquisition of a power plant and port in Hazira, and a port at Paradip in Odisha, for Rs 16,500 crore from the Essar Group.