Essar Steel Limited, part of the Rs 20,000 crore Essar Group on Thursday announced expanding its steel making capacity from 2.4 MTPA (million tonnes per annum) to 4.6 MTPA at a cost of Rs 2,000 crore.

With the completion of capacity enhancement by mid 2006, Essar would be able to produce as much steel as Tata Steel - 4.5 MTPA, Prashant Ruia, managing director, Essar Steel Limited said.

He was speaking at the commissioning of its 100 MW power plant, inaugurated by minister of state for energy and petrochemicals, Gujarat Saurabh Patel, on Thursday.

This is the first phase of the 350 MW plant planned to meet the requirements of the expansion of the steel plant. The capital cost of the captive power plant is around Rs 750 crore and it is expected to achieve full capacity by September 2006. The Essar Steel Limited already has a 32 MW captive power plant.

The steel plant, Mr Ruia, said would be expanded through internal accruals. The work on the plant has already begun, he added.

He further said that the expansion would also help to increase steel export, which currently stands at 35 per cent to 40 per cent of the total steel production. Essar Steel is the largest exporter of flat steel to Europe, Middle East, Far East, Mr Ruia claimed.