Ministry of Steel is planning to modernise and expand the capacity of public sector Visvesvaraya Iron and Steel Limited located at Bhadravathi in Shivamogga district.
"Setting up of a new steel plant with one million tonne capacity normally requires Rs 6,000 crore investment. We are thinking of replacing old machinery and also increase the capacity of VISL to one million tonnes per annum," Chaudhary Birender Singh, Minister of Steel said.
Currently, the capacity of VISL is 0.4 million tonne per annum, Singh told reporters after chairing the Steel Consumers' Council Meeting, here on Friday.
VISL was set up in 1923 by the Engineer Statesman of the erstwhile State of Mysore Sir M Visvesvaraya in 1923 as a small pig iron unit and gradually matured into a modern steel complex. However, over the last few years, the company has run into losses due to shortage of iron ore and worn out machinery. Presently, its accumulated losses are Rs 270 crore.
The government has deputed a team of experts from the parent company Steel Authority of India Limited and engineering consultancy firm Mecon Ltd to prepare the turnaround plan for VISL, the minister said.
"A couple of years ago, the government was thinking of disinvesting the VISL. Later, it was decided to revive the company by modernising it. Currently, the company does not have its captive iron ore source and the ministry has requested the government of Karnataka to allot a captive mine," Singh said.
The government of Karnataka has already reserved a captive mine and sent a proposal to the Central government for approval, the minister said, adding that this will pave way for the upgradation of the steel company.
VISL has an installed capacity of 2,16,000 tonnes of hot metal and 98,280 tonnes of alloy & special steels. Other facilities include vacuum degassing, vacuum oxygen decarburisation, ladle refining furnaces, ingot teeming, continuous casting, 1,600 Tonnes-hydraulic-high-speed forging press, a fully automatic horizontal long forging machine with high programmable Logic Controller system for a semi-automatic and automatic mode of operation.