The Central government has agreed in principle to set up a scrap based Electric Arc Furnace (EAF) steel plant at Palvancha in Telangana’s Kothagudem district, Union Steel Minister Chaudhary Birender Singh told reporters here on Friday.

He said that the state-of-the art plant of 1.5 million tonne per annum capacity would be set up at Palvancha in Kothagudem after the techno-economic feasibility is established.

He said the Ministry of Steel will set up the plant considering the availability of land and other resources.

The plant is proposed to be set up 450-acre site of a sponge iron plant which became defunct in 2008.

The minister said state-run miner National Mineral Development Coproration (NMDC) had been asked to conduct a detailed study in this regard.

The ministry is open to take up the plant through a joint venture with Telangana government or in Public Private Partnership (PPP) mode.

Thanking the Central minister for announcing the plant at Paloncha, Telangana’s Industry Minister K.T. Rama Rao requsted him to also ensure setting up of an integrated steel plant at Bayyaram.

Steel plants at Bayyaram in Telangana and in Kadapa district of Andhra Pradesh were promised in the Andhra Pradesh Reorganisation Act.

Earlier, addressing golden jubilee celebrations of NMDC, Birender Singh said the report of Task Force would be made public in a month.

He said based on the final report, the public sector or private sector companies would be encouraged to set up the plant in Andhra Pradesh.

For Bayyaram, NMDC would provide the iron ore linkages and Telangana government would provide the railway line for supply of iron ore from NMDC mines and coal from Singareni Colleries Company Ltd.

Rama Rao said Bailadila railway line in Chhattisgarh could be used for transport of iron ore.