Lloyds Metals & Energy Ltd is considering raising the capacity of its proposed steel plant in Maharashtra to as much as 8 million tonnes a year, as surging iron ore production bolsters its downstream ambitions.
The company has received environmental clearance for a 4.5 million tonne a year (mtpa) steel plant at Konsari in Gadchiroli, up from the 3 mtpa facility originally planned, and is evaluating whether to take the capacity as high as 8 mtpa, according to two people familiar with the matter. Board approval is pending, they said.
To be sure, a decision on the final capacity will determine the project’s investment requirement and whether any additional environmental approvals are needed.
The potential scale-up comes even as Lloyds is yet to commission its first steelmaking plant. It is executing a 1.2 mtpa electric-arc-furnace wire-rod unit at Ghugus in Maharashtra’s Chandrapur district, which it expects to commission by March 2027.
“The management is currently evaluating the optimal product mix and suitable scale for the steel capacity at Konsari. While the initial plan was for a 3 mtpa steel plant, the final capacity could be higher to establish the most viable and feasible greenfield primary steelmaking project,” a Lloyds Metals spokesperson said in an email response to Mint’s queries.
The proposed expansion reflects Lloyds’ growing confidence in its iron ore business and its ability to use captive ore to move further downstream into steelmaking. The company expects iron ore production to reach about 26 million tonnes in fiscal year 2027 (FY27) from 21.96 million tonnes in FY26, giving it a much larger raw-material base to support an integrated steel business.
On its fiscal first-quarter (Q1FY27) earnings call, managing director Rajesh Gupta had said Lloyds was studying whether it could build a larger steel plant on the same land instead of proceeding with the originally planned 3 mtpa facility using the blast furnace route. The company is undertaking technical, commercial and financial studies before deciding how much capital should be allocated to the project, he said.
“We believe we can do a larger plant in the same location,” Gupta had said, adding that the plans are yet to be finalized or approved by the board.
The potential scale-up would mark a significant step up in Lloyds’ steel ambitions. Its Ghugus project, once commissioned, will be its first major steelmaking operation, while the proposed Konsari plant could be several times larger.
The company has said the project will mark its first major step into steelmaking, extending the integration and cost-control strategy it has pursued in its iron ore and pellet businesses.
Together, the Ghugus and Konsari steel projects are expected to involve investments of ₹20,000-25,000 crore over the next five years, B. Prabhakaran, the company’s co-promoter and managing director, had told Mint earlier.
“Lloyds’ consideration of increasing the capacity of its previously planned 3 mtpa plant is driven not only by the growing steel demand in India but also by the value addition it can create for the company’s iron ore mining business. The company already has one key raw material secured through its captive mines, while it may still need to import coking coal,” said Dhruv Goel, chief executive, BigMint, a commodities market intelligence firm.
That captive ore could become increasingly important as Lloyds scales up steelmaking. By FY28, the company expects about 2.4 million tonnes of iron ore and pellet production, on a combined basis, to be consumed internally, including an additional 1.4 million tonnes by the steel plant.
The company's expanding raw-material base is already visible in its operating numbers. Lloyds produced 6.05 million tonnes of iron ore in the June quarter, up 53% from a year earlier, while sales rose 58% to 5.46 million tonnes. Pellet production stood at 1.69 million tonnes after its second pellet plant reached full capacity utilisation within four months of commissioning.
Lloyds has also lowered the cost of moving that ore through its slurry pipeline, which has reduced logistics costs by ₹500-550 per tonne, according to chief financial officer Riyaz Shaikh.
