Steel Authority of India has identified Jaiprakash Associates as the strategic partner for setting up a 2Mt slag-based cement unit at its Bhilai Steel Plant. In an intimation to exchanges, the company stated that a letter of intent was being issued to Jaiprakash Industries.

The proposed cement plant would be set up by a joint venture company, in which SAIL would hold 26 per cent stake while the rest will be held by Jaiprakash. The plant would use slag generated at the blast furnace at Bhilai.

The investment plan for the venture was being chalked out. Further, the limestone would be made available to the venture from SAIL’s limestone mine at Satna. Shree Cements was also in the fray for the joint venture. It is likely that once the capacity of the plant is increased, as per SAIL’s corporate plan, the capacity of the cement plant too would go up. Bhilai has a hot metal production of 4.93 million tonne, which would increase to 7 million tonne by 2011-12, as per the plan.

The primary objective behind the joint venture was that the public sector undertaking wanted a reliable offtake for its slag and the most reliable form was to go for a joint venture. There would always be some element of uncertainty in long-term agreements.

Earlier, there was a similar plan for Bokaro Steel Plant but sources in SAIL said that that the plan had fizzled out after the tendering process. Bokaro and Bhilai were the biggest plants of SAIL. Bokaro’s production, currently at 4.11Mt, would be enhanced to 6.5Mt. Tata Steel had a cement division, which it sold in 1999, paving the way for the entry of Lafarge into India.