Tata Steel Plans Major Expansions and Ore Partnerships

Tata Steel has moved ahead with another round of domestic expansion, clearing projects that touch long products, flat steel and specialised automotive grades. The announcements were released together, signalling how the company is planning not just for near-term demand but also for a significantly changed raw-material landscape and supply dynamics expected after FY2030. This naturally brings up a broader market question: Is this a sign of rising confidence, or a precautionary move ahead of potential shifts in cost pressures?

Where is Tata Steel Adding New Capacity?

The largest addition is planned at Neelachal Ispat Nigam Ltd in Kalinganagar. Tata Steel intends to lift output there by 4.8 million tonnes a year. It is an area where construction-linked activity has stayed firm, so the timing is pragmatic.

The company will install a hot-rolled pickling and galvanising line with an annual capacity of 0.7 million tonnes in Tarapur, Maharashtra. The line is meant for automotive clients that often depend on imported coated steel. Bringing such a line into the domestic network adds a capability that the company has not had at scale.

A third project is slated for Meramandali in Odisha. Here, a thin slab casting and rolling unit of 2.5 million tonnes will broaden the flat products range, especially thinner gauges. Combined, these three locations support Tata Steel’s domestic ambition of reaching 40 million tonnes by 2030, though the pace of commissioning will matter in the years ahead.

Tata Steel Preparing For Raw Material Requirements

A key driver of the recent decisions is the expiry of captive mines under the MMDR Act. Analysts at Kotak Institutional Securities pointed out that the cost structure could shift noticeably from FY2031. It is a concern that seems to be shaping the company’s next steps.

A key move is the approval to acquire 50.01% of Thriveni Pellets. The deal includes Brahmani River Pellets, which owns a 4 million-tonne pellet plant and a long slurry pipeline in Odisha. Pellets are a key feed for steelmaking and securing them directly helps reduce supply chain uncertainty.

Another move is a memorandum of understanding with Lloyds Metals and Energy. The two sides will look at mining prospects in Maharashtra and determine whether a greenfield plant of up to 6 million tonnes, built in phases, is feasible. The MoU also opens room for collaboration on logistics and pelletisation. This project is subject to further evaluation, due diligence, and internal and regulatory approvals, but it shows the company setting up options ahead of a period where raw material access could tighten.

Accelerating Efforts in Low Carbon Steelmaking?

A separate track of the board discussion focused on HIsarna, a technology Tata Steel has tested for about a decade at its pilot plant in IJmuiden, in the Netherlands. The method relies on lower grade ore, avoids coke and incorporates steel slag. It has been presented as a possible path to lower emissions and lower capital intensity.

The board has now approved engineering and regulatory preparations for a 1-million-tonne demonstration plant in Jamshedpur. The company said recent joint trials with a global steel producer have progressed well. For Tata Steel, the move is a sign that its research pipeline is gradually shifting toward commercial deployment.

Tata Steel’s Positioning for the Next Decade

The expansion projects, pellet integration, early stage mining tie-ups and the push toward HIsarna give a picture of a company preparing for both demand growth and supply side challenges. The real test will come when these plans move into execution. If the current momentum holds, could this strategy help Tata Steel balance growth and cost discipline through the coming decade?

Sources

Mint
Odisha Bytes
MSN
Moneycontrol