Tata Steel plans ?10,000 crore of capex a year to hit 40 mtpa by 2030

Tata Steel Plans ?10,000 Crore Annual Investment to Boost Production Capacity to 40 Million Tons by 2030

Tata Steel is set to invest approximately ?10,000 crore annually in capital expenditure to expand its production capacity to 40 million tons per annum (mtpa) by 2030, as announced by N Chandrasekaran, Chairman of Tata Sons Limited, at the company’s annual general meeting on Monday.

Chandrasekaran emphasized that Tata Steel is committed to both capacity expansion and transformation towards sustainable steelmaking processes to reduce carbon emissions. The company will continue to deploy effective strategies and advanced technologies to achieve its decarbonization goals.

The Kalinganagar plant is undergoing an expansion from 3 mtpa to 8 mtpa, with plans to increase capacity by an additional 5 mtpa in the third phase, aiming for a total of 13 mtpa. Additionally, the NINL subsidiary, part of the Kalinganagar ecosystem, will expand from 1 mtpa to 5.5 mtpa in the coming years. Tata Steel's new 0.75 mtpa scrap-based low-carbon electric-arc furnace in Ludhiana is expected to commence operations by 2026, contributing to an expanded long product portfolio. The company aims to complete its expansion in the next 8 to 10 years while systematically reducing its debt with excess cash flows, targeting a debt-to-Ebitda ratio below 3.

In its international operations, Tata Steel will continue transforming its sites, with the second blast furnace in the UK likely to close by September due to safety concerns. This will be replaced with electric-arc furnaces through a £1.25 billion investment in partnership with the UK government. Despite the recent change in UK government, discussions regarding Tata Steel UK remain unaffected. The company’s UK plant has been facing significant financial challenges due to aging assets. Tata Steel is also negotiating with the Dutch government for financial and policy support for a major decarbonization plan, which includes replacing one of its two blast furnaces with hydrogen-based direct reduction of iron (DRI) technology.