Mumbai (Maharashtra) [India], October 8 (ANI): Lloyds Metals and Energy Ltd (LMEL), India’s largest listed iron ore miner by market capitalisation, is preparing for its most ambitious leap yet: a ₹25,000 crore expansion that will see it transform from a pure-play miner into a fully integrated steelmaker with 6mn tonnes of capacity by 2030.
The expansion, led by managing director B Prabhakaran, marks a pivotal shift for the company and the central Indian region of Gadchiroli, where it is anchoring its growth. Once synonymous with Maoist insurgency, Gadchiroli is now emerging as a hub for heavy industry and infrastructure investment, underpinned by LMEL’s steel plans.
Expansion blueprint
The centrepiece of the company’s growth strategy is a 4.5mn tonne blast furnace in Gadchiroli, slated for completion by late 2027 or early 2028, followed by a 1.2mn tonne furnace in Chandrapur by 2029-30. Alongside this, LMEL is commissioning a 5mn tonne pellet plant in the current financial year, part of a phased plan to expand pellet capacity to 12mn tonnes.
The integrated steel complex will initially focus on producing 3mn tonnes of hot-rolled coils and 1.2mn tonnes of wire rods, supplying key industries from construction to automotive manufacturing. With India’s steel demand projected to climb, LMEL expects annual cash flows of ₹3,000-5,000 crore from fiscal 2026, providing the backbone for its capital expenditure programme.
Funding discipline
Unlike many peers in the capital-intensive steel sector, LMEL plans to rely largely on internal accruals from its 25mn tonne annual iron ore production. The company has already invested ₹5,000 crore and intends to keep debt at conservative levels.
“We are not debt averse but would like to be very calibrated in debt raising,” said Prabhakaran. “I would like my net debt to be lesser than my Ebitda.”
The company reported consolidated Ebitda of ₹808.7 crore in the June quarter and expects to sustain healthy margins as new capacity comes onstream.
In January this year, LMEL further strengthened its foundation with the acquisition of a 79.8 per cent stake in Thriveni Earthmovers, one of India’s largest mining Developer operators. The deal brought with it an order book worth ₹70,000 crore over the next 15-18 years, expanding Lloyds’ mining capabilities across India and abroad.
While India’s steel industry is notoriously capital intensive — with each million tonnes of capacity typically costing ₹6,000-8,000 crore — LMEL believes it can achieve lower costs by training local workers, sourcing raw material nearby, and handling construction in-house rather than through contractors.
For a company that was loss-making just two years ago, the turnaround has been striking. After posting profits of less than ₹100 crore annually for years, LMEL has now delivered more than ₹1,200 crore in consolidated profit over the past two years. Its share price has risen 48 per cent over the past year and nearly 10-fold since Prabhakaran’s appointment.
With surging demand, state subsidies covering up to 150 per cent of capital invested, and a supportive logistics and security environment, Lloyds’ bet on steel looks well timed.
Steel demand outlook
The expansion coincides with a period of robust global steel demand. Verified Market Research estimates the global steel market, valued at $1.25 trillion in 2024, will reach $2.08 trillion by 2032, growing at a compound annual rate of 2.25 per cent from 2026.
Drivers include infrastructure spending, urbanisation and industrialisation in emerging economies, particularly India. Steel demand is also being reinforced by growth in the automotive and energy sectors. “With the government’s support, we can compete with China’s quality and grade of steel,” Prabhakaran said.
For LMEL, the strategic choice of Gadchiroli and Chandrapur offers logistical advantages. Railway connectivity is being upgraded with the Wardha-Gadchiroli line expected in 18 months, while the Samruddhi expressway is already slashing transport costs. Most of LMEL’s products are marketed within a 300-350km radius, giving it a strong cost edge.
Green mining and sustainability edge
LMEL is also differentiating itself through a focus on environmentally sustainable mining and steelmaking. The company’s ore averages 67 per cent iron content with minimal impurities, which reduces energy intensity during processing and makes it well suited to “green steel” production.
The miner transports ore through a 90km slurry pipeline rather than by road, reducing truck traffic, emissions and dust pollution. It has converted much of its heavy transport equipment to electric power and invested in water conservation measures to improve resource efficiency.
Through its Triveni division, LMEL also rebuilds and recycles heavy equipment in-house, lowering both costs and the carbon footprint of operations. “We emphasise quality-driven production, environmental sustainability, and inclusive growth,” the company said.
These measures position LMEL to align with global steelmakers’ rising preference for cleaner inputs as investors and regulators tighten climate standards.
The scale of the ambition reflects Prabhakaran’s track record in turning around the group’s fortunes. When the company entered into a strategic partnership with Thriveni Earthmovers Private Limited, led by Mr. B Prabhakaran, in March 2021, Lloyds’ market capitalisation was around ₹650 crore. Today, it has soared to nearly ₹65,000 crore, a hundred fold increase in just 4 years, underpinned by a return to profitability after years of losses.
The company has delivered consolidated profits exceeding ₹1,200 crore over the past two years. Its share price has gained nearly 50 per cent in the past 12 months and almost 10 times since Prabhakaran’s appointment.
LMEL’s expansion is also reshaping Gadchiroli itself. Bordering Chhattisgarh and Telangana, the district was long part of India’s “red corridor”, plagued by Maoist insurgency. But improving security and new investment are changing its trajectory.
Maharashtra Chief Minister Devendra Fadnavis has positioned Gadchiroli as a future steel hub. In July, he inaugurated a 5mn tonne iron ore grinding unit and a 10mn tonne slurry pipeline at Hedri — the first in the state — along with the foundation stone for LMEL’s 4.5mn tonne steel plant, a 100-bed hospital, a CBSE school and a 116-acre township.
“A massive socioeconomic transformation is taking place in Gadchiroli since Lloyds Metals began industrialisation in the district,” Fadnavis said, predicting the region would be among the state’s top 10 districts by per capita income within five years.
The company has already created 12,000 jobs in the district and expects the new steel plant to add further 20,000 more. Significantly, more than 10,000 employees have been given shares under a stock option plan, embedding local participation in its growth. (ANI)
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