In a major boost to India’s steel industry, a collaboration between ArcelorMittal and Japan's Nippon Steel, has announced plans to establish a greenfield steel project with a capacity of 17.8 million tonnes in Andhra Pradesh's Anakapalli district. With an aggregate investment of INR 1.4 lakh crore, this project will be of the largest in recent years.

The project’s first phase involves constructing a 7.3 million metric tonnes per annum (MMTPA) blast furnace steel plant with an initial investment of INR 80,000 crore. The company has requested 2,600 acres of land for this phase. In the second phase, AM/NS intends to expand by adding 10.5 MMTPA capacity with an additional investment of INR 60,000 crore, requiring an extra 2,000 acres of land.

According to government officials, around 1,800 acres are readily available adjacent to the Nakkapalli bulk drug park, a potential site for the first phase of the project. Manoranjan Kumar, Chief of Ports Operations and Development at AM/NS emphasised the strategic significance of the location. “We plan to have a steel manufacturing capacity of 40 MMTPA by 2035. As part of this expansion plan, we were looking for coastal locations in Andhra Pradesh and Odisha. The key issues in setting up a steel project are the availability of land and port facilities. Nakkapalli fulfills both the criteria,” Kumar said in an exclusive interview with Economic Times.

The ambitious project was secured during a Zoom meeting in July between Andhra Pradesh’s IT Minister Nara Lokesh and ArcelorMittal CEO Aditya Mittal. Lokesh, reflecting on the discussion, said, “We heard that AM/NS was scouting, and I reached out to their India team to understand their requirements. I then connected with Aditya Mittal and set up a Zoom call, where we discussed and closed things. Finally, the chief minister had a call with Mr Lakshmi Mittal to give finishing touches to the investment.”

One of AM/NS’s primary requests for the project at Nakkapalli is the establishment of a captive jetty, which will facilitate global sourcing of raw materials at competitive prices. Kumar explained, “It helps in sourcing raw materials globally and at internationally competitive prices. This is important in our strategy to expand. The site at Nakkapalli is very promising on this account.”

This landmark project is expected to provide a substantial economic boost to Andhra Pradesh and align with AM/NS India’s broader vision of significantly expanding its steel production capacity over the next decade.