Why Jindals need deep sea port?

The JSW Group of Sajjan Jindal is building an integrated steel plant at Salboni in West Midnapore district. It will have capacity to make 10 million tons of steel when completed. The total investment will come to about Rs.15000 crore. PM Manmohan Singh will lay the foundation stone of the plant early next month. [Image source]

A few days back Sajjan Jindal met CM Buddhadeb Bhattacharjee and expressed his interest to set up deep sea port being planned off Bengal’s coast in the Bay of Bengal. He is likely to start a pre-feasibility study in February even as the shipping ministry at the center continues dithering to appoint a consultant for the same job.

Jindal’s interest for the port came as a bit of surprise. But in today’s TT things get clear as to the reasons thereof.

The proposed deep sea port off Sagar Island in the bay is likely to receive iron ore in large bulk carriers. The ore will come from Chile where the Jindals have acquired a 1200-hectare mine.

If ore is from Chile, the coking coal will come from Mozambique and possibly from Canada and Australia as well.

The Salboni steel plant will produce 6 million tons in the first phase. This will increase to 10 million tons in phases.

The total cost has debt component of Rs.10000 crore and equity Rs.5000 crore. Of the equity component, the parent company JSW Steel will bear up to Rs.1500 crore. The balance will be raised through an IPO at an appropriate time.

Summing up, the new company, JSW Bengal Limited, will not only have the steel plant, but also a captive power plant, a cement plant, and maybe the deep sea port – all these in less than a decade. That’s a lot indeed.

Update (Jan 31, 2008):
Sajjan Jindal is having company – competition rather – of Venugopal Dhoot to build the deep sea port. Meeting CM yesterday, the Videocon chief has put his claim for the port. This is a good sign because it indicates the port will likely have good prospects when built.