ESSAR Steel will further expand its steel melting capacity to 4.6m tonnes from 3.6m tonnes through debottlenecking, productivity improvements and technology upgradation. The 1m-tonne addition will be carried out after the capacity expansion from 2.4m tonnes to 3.6m tonnes is completed later this year.

The project is estimated to cost the company approximately Rs 2,000 crore, which will be financed through a mix of debt and internal accruals, Essar Steel's MD, Prashant Ruia, said.

Referring to reports on the various projects outside India being taken up by the Essar Group, Mr Ruia said, "The group is evaluating various opportunities for growth in the domestic and international space." This process is being followed by most steel companies in India and abroad, he added. However, any decision for investment will only be made after careful consideration, viability assessment and financial closure of the project.

Daniell of Italy has been mandated to upgrade the three existing electric arc furnaces of Essar, which will increase capacity of each to 1.2m tonne from 800,000 tonnes at present.

Essar has also added a new 1m-tonne per annum module to its Direct Reduced Iron (DRI) plant. The DRI capacity has been increased to 35m tonnes per annum.

Essar Steel is currently on a drive to be a fully integrated player with a presence across the entire value-chain from iron ore to finished products. Mr Ruia said, to achieve full integration, the company will acquire the 51% stake from Stemcor in Hy Grade Pellets and a 100% stack in Steel Corporation of Gujarat (SCGL), which manufactures downstream value-added steel products like cold rolled coils and galvanised steel.

Hy Grade operates a 4m-tonne iron ore pellet plant and is in the process of completing an 8m-tonne beneficiation plant and slurry pipeline.