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Tata Steel Plans 16,000 Cr. CapEx for FY25, Targets 40 MMTPA Production by 2030

Tata Steel logo

Indian Steel giant, Tata Steel Limited will be investing approximately Rs. 16,000 crore in FY25. Additionally, the company targets expanding its production capacity in India to 40 Million Metric tonnes per Annum (MMTPA) by 2030 from the current 21.6 MMTPA.

Tata Steel Earmarks 75% of FY-25 CapEx for India Operations, Remainder to be Invested in the UK

Out of Tata Steel’s Rs. 16,000 crore CapEx for FY-25, 75% (that is about Rs. 12,000 crore) will be invested in India while 25% (about Rs. 4,000 crore) is for decarbonisation of Tata Steel’s operations in the UK.

Majority of FY-25 CapEx for Kalinganagar Plant, Ongoing Expansion to be Complete by 2024-end

During the company’s analyst call for its Q4 FY-24 financials, Mr. Koushik Chatterjee, ED & CFO, Tata Steel Limited, mentioned that majority of Tata Steel’s FY25 CapEx will be for the ongoing expansion of its Kalinganagar plant in Odisha.

Since November 2018, Tata Steel has been in the process of expanding production capacity at Kalinganagar Steel plant by 5 MMTPA, to 8 MMTPA. The company’s investment during FY-25 at Kalinganagar will be targeted towards completion of this expansion by 2024-end.

As a part of this expansion, India’s largest blast furnace with a capacity of 5,870 cubic metre has been installed at Tata Steel’s Kalinganagar facility. Tata Steel mentioned in its May 2024 investor presentation that stove heating has been initiated at the 5 MMTPA blast furnace at the plant.

Tata Steel Targets Decarbonisation of its Operations in the UK

Tata Steel will spend 25% of its FY25 CapEx for decarbonisation operations at its Port Talbot Steel Plant. A transition from blast furnace to electric arc furnace (EAF) will take place over a period of three years. The transition is aimed at reducing the carbon emissions by almost 5 Million Tonne per Annum (MTPA).

Major Expansions Lined Up for Tata Steel’s 40 MMTPA Production Target for 2030

Steel Plant

Tata Steel has major expansions lined up to take its total production capacity to 40 MMTPA in India by 2030. These expansions taken together will add about 17 MMTPA to Tata Steel’s existing manufacturing capacity in India.

While elaborating on Tata Steel’s 2030 target, Mr. T.V Narendran said, “…next phase [at Kalinganagar Steel Plant] will be from 8 MMTPA to 13 MMTPA”. Apart from this, Tata Steel will be expanding the manufacturing capacity of its plant in Meramandali in Odisha to 7 MMTPA from the current 5 MMTPA. Tata Steel will also increase capacity at Neelachal Ispat Nigam Ltd.’s (NINL) plant in Odisha. “In Neelachal, we are at 1 MTPA. We are running full out already. First phase is to take it to about 4.8 – 5 MTPA”, explained Mr. Narendran. Further, The company is in the process of setting up an Electric Arc Furnace (EAF) based Steel plant in Ludhiana, which is expected to be commissioned in ‘the next two years’, and add about 1 MMTPA to Tata Steel’s overall capacity.

10 MMTPA of Capacity Addition Possible Beyond 2030 Target – Tata Steel MD

During the earnings call, Mr. Narendran said, “…beyond the 40 MMTPA, we have another 10 MMTPA, which we can add in our existing sites”. He was taking into account the possibility of expanding the Kalinganagar plant’s capacity by 3 MMTPA, expansion of NINL’s capacity by 5 MMTPA, and 3 MMTPA expansion at the Meramandali plant after the company’s 2030 target is met.

About Tata Steel Limited: Tata Steel is a top steel manufacturing company, with operations across India, Europe, and Thailand. In India, it had a turnover of Rs. 82,125 crore in FY23-24, with operations spanning mostly in Jharkhand, West Bengal, and Odisha. Tata Steel covers 15 of the 17 parameters of United Nation’s Sustainable Development Goals and has a target of reducing 30% of its carbon emissions by 2030.