For its greenfield mill, the Jindals set their eyes on the Bellary-Hospet ore belt and decided to revive the old idea of the Vijaynagar steel plant. Besides the location's proximity to iron ore, the Jindals mainly were attracted to the area because land for the plant already was acquired under the previous project proposal. Land acquisition is a very tedious process in India. Sufficient water is available from the reservoir of the nearby Tungabhadra dam. The site also is close to the wide-gage rail line that leads to port towns of Madras on the east coast and Marmagoa on the west coast.
Noncoking coal is much less expensive than metallurgical coking coal and is abundant in India.
In 1986, Sail conducted trials at Voest-Alpine's Corex demonstration plant in Germany, Dr. Gupta says. It established the technical feasibility of using Indian ore and noncoking coal at a Corex plant, but the economics weren't viable. Moreover, the proposed selling price for the surplus Corex gas as a substitute for furnace oil at steel plants wasn't high enough. But the situation changed radically after the government gave Indian companies the freedom to source capital equipment from anywhere in the world at low import tariffs. Recycling Corex gas Because of the government's encouragement of investment by private power utilities, the Jindals are installing a power plant next to the new facility that will use surplus Corex gas as fuel.