Canada-based Essar Steel Algoma, part of $5-billion Essar Steel Holdings (ESH) has informed that the company is exploring the options to pump Rs 1,200 crore in expanding its steel capacity and building a power plant. 

The conglomerate will also upgrade air pollution control technology in the coming 18 months. 

The expansion would be primarily funded through internal accruals. 

According to the sources, the firm is also looking for acquisition of coal and iron ore blocks in Africa, Indonesia, Middle East and North America to meet its raw material demand. 

The reports revealed that Essar Steel Holdings, had acquired Canada-based Algoma Steel for $1.85-billion last June. 

Aiming at the rising demand for flat steel products in the Canadian market, the conglomerate would make additional investments in scaling up the capacity to 3.6 mtpa in the coming fiscal.

For this, it has restarted a blast furnace, which had been idle since 1995.

While commenting on the plans, Mr. Sandeep Dixit, Essar Steel Algoma vice-president, stated, “Majority of the expansion would be funded through self-generated cash. Continued strong cash flow will enable the company to further reduce debt while maintaining an active capital investment program.” 

Currently, Essar Steel Algoma purchases iron ore and coal for steel making from the open market.