VIJAYAWADA: The State government is likely to enter into an agreement with South Korean automobile major Hyundai Motors, which is also into manufacturing of steel, to invest in the proposed steel plant at Sunnapurallapalle in Jammalamadugu mandal of Kadapa district.
Though the iron ore available at the proposed site is not of high quality, officials associated with the project said Hyundai prefers Kadapa due to its logistical advantages. The proposed AP High Grade Steels Limited will be a Joint Venture between Hyundai, AP Mineral Development Corporation, and the State government.
Explaining the advantages Kadapa offers, an official said 10,000 hectares of land are available, apart from water, which can be drawn from Gandikota reservoir, rail connectivity at Muddanur railway station, the dedicated Krishnapatnam railway line, and power from the Rayalaseema Thermal Power Project (RTPP).
Asked about the availability of substandard iron ore in Kadapa, the official said raw materials would not be a key factor in choosing the site. High-grade steel can be imported from Australia or Indonesia to Krishnapatnam port and transported to Kadapa through the dedicated railway line.
Hyundai is eyeing the local market to sell manufactured rolling steel, the official said, adding that it can find a good market for its produce in South India, including the automobile hub in neighbouring Tamil Nadu. According to the official, the automobile giant also plans to set up a new unit in Visakhapatnam, for which the rolling steel can be used.
The proposed steel plant, which is likely to come up at an investment of `15,000 crore, would produce three million metric tonnes of steel per annum. There are plans to expand the capacity to 1o million metric tonnes in a phased manner.
It may be recalled that Chief Minister YS Jagan Mohan Reddy laid the foundation stone for the proposed steel plant at Sunnapurallapalle in Jammalamadugu mandal of Kadapa district on December 23, 2019. The plant is estimated to provide 20,000 jobs, and with the State government coming up with a legislation to provide 75 per cent jobs to locals, the setting up of the plant would provide jobs to the youth of drought-prone Rayalaseema, officials said.