Jayaswal Neco Greenlights ₹720 Crore Raipur Pellet Plant Expansion

Jayaswal Neco Industries' Board of Directors has approved the establishment of a new 1.50 million tonnes per annum (MnTPA) Straight-Grate Pellet Plant. The project, located at the company's Integrated Steel Plant in Siltara, Raipur, Chhattisgarh, will involve an investment of Rs. 720 crore.

The expansion will be funded through a combination of term debt, amounting to Rs. 540 crore, and Rs. 180 crore sourced from equity and internal accruals. Construction of the pellet plant is expected to take approximately 24 months.

This strategic investment is designed to enhance the utilization of iron ore from Jayaswal Neco's captive mines. The new plant will convert iron ore fines, a byproduct of mining, into valuable pellets. This move strengthens the company's backward integration, reducing reliance on external suppliers for a key steelmaking input and aiming to improve cost efficiencies.

The addition of 1.50 MnTPA capacity signifies a substantial upgrade to the company's manufacturing capabilities. As a marketable commodity, iron ore pellets also present potential for new revenue streams or improved margins on existing sales.

The project's progress hinges on securing necessary approvals from the company's existing lenders, with timely financial closure for the Rs. 720 crore investment being a critical hurdle.

Jayaswal Neco's focus on pelletization aligns with a broader trend in the steel industry, where major players like JSW Steel and Jindal Steel & Power Ltd (JSPL) are also investing in similar facilities. These companies are enhancing raw material efficiency and pursuing backward integration to secure inputs and boost cost competitiveness.