PRE-FEASIBILITY REPORT

of

1.2 MTPA (GGBS/PSC) Grinding Unitat

Kudikadu Village,Cuddalore, Tamilnadu, India

by

JSW CEMENT LTD

Prepared By

B.S. ENVI-TECH (P) LTDSecunderabad – 500 017

Table of ContentsCONTENTS

1. Executive summary

2. Introduction of the project/ Background information

3 Project Description

4 Site Analysis

5. Planning Brief

6 Proposed Infrastructure

7. Rehabilitation and Resettlement (R & R) Plan

8. Project Schedule & Cost Estimates

9. Analysis of Proposal (Final Recommendations)

1.0 EXECUTIVE SUMMARY

M/s JSW Cement Limited (JSW) proposes to setup a CementGrinding Unit in at Kudikadu Village, Cuddalore District inTamilnadu. JSW wishes to produce GGBS & PSC as per the marketdemand.

Plant will have a VRM of 1.20 MTPA capacity.

The plant will be located in an area of 40 acres in SIPCOTIndustrial Estate

The principal raw materials are Clinker, Slag and Gypsum. The majorraw material, Clinker will be met from Cement plants of JSW.

Water requirement of the plant is 500 m3/day and will be met fromSIPCOT supply

No solid waste generation from the plant.

No process wastewater generation

There is no wild life sanctuary, national park, eco-sensitive areawithin the 10 km radius of the project site.

Infrastructure include railway siding , roads, storm water drains withadequate storage space for clinker and flyash and parking area will bedeveloped.

Greenbelt will be developed in about 13.2 acres

Power requirement will be supplied by SIPCOT

Total capital Investment Cost is Rs 245 crores

Various sensitivity analysis indicate reasonable project and cashbreak- even percentages. In view of the acceptable level of returns, theproject is financially feasible.

2.0 INTRODUCTION OF THE PROJECT/ BACKGROUNDINFORMATION

(I) IDENTIFICATION OF PROJECT AND PROJECT PROPONENT

O. P. Jindal Group is the Principal / Promoter shareholder in JSWCEMENT LIMITED, an Indian based registered company, in Mumbai.

JSW has an integrated cement manufacturing plant in Nandyal, A.P,India. The group has two cement grinding units in Vijayanagar,adjacent to JSW steel plant near Bellary, Karnataka and in Dolvi,Maharashtra.

The Units have a combined capacity of 6 Million Tons Per Annum(MTPA). JSW Cement is leading the way in promoting PSC variant ofcement in India. Portland Slag Cement (PSC) also known as greencement as it generates least amount of CO2 during production and alsogenerates least heat during concreting.

PSC (Portland Slag Cement) produced by JSW Cement, can be used asreplacement to Ordinary Portland Cement (OPC) during concreting andis being widely used in the coastal cities. PSC can replace OPC in usewhich also makes economic sense for the RMC manufactures.

(II) NEED FOR THE PROJECT AND ITS IMPORTANCE TO THECOUNTRY AND OR REGION

It is expected that, the Cement demand will grow at much higher ratethan the national average. The bulk distribution of cement in theregion is likely to see a high growth due to a number of new ReadyMix concrete plants and projects. Considering this, JSW proposes tosetup Cement grinding unit capacity of 1.2 MTPA.

Opportunities for the Industry

Though India ranks second in the world in cement production, its percapita annual consumption is very low. Per capita consumption inIndia has grown from a low level of 70 kg to around 110 kg over thelast 8 years, which is still way behind the world per capitaconsumption of 307 kg (as of 2003). Cement Industry has growthpotential not only within the country but also for exports to the

neighboring countries. With Indian growth rate rising, theopportunities for the industry seem to be large.

Cement consumption in the coming years is likely to get a fillip fromGovernment initiatives for housing and infrastructure:• State highway development projects being undertaken by some

states• 10,000 km of additional highways (25% concrete)• Rural roads construction• Housing finance growing by over 25-30% annually• IT parks and SEZ zones development in proximity to metros

(III) DEMAND- SUPPLY GAP

Market demand and projections

Cement growth is expected to be above the GDP growth of thecountry, which is expected to be around 8% for the coming years. TheIndian cement Industry is poised for a period of significant growth andthe demand for cement is expected to match the current availabilityby the end of the current fiscal. Cement demand has registered aCAGR of about 8.5% over the last decade. In fact, at the current levelsof growth, the cement industry may have to add over 90 Million Tonsof cement capacity to meet the demand for cement over the next 5years.Cement companies were operating at levels below capacity in the pastbut with the demand and supply reaching equilibrium, almost allplants are working at above 90% capacity. The rate of growth incement demand is growing at a faster pace as compared to thecapacity expansion. This will improve the realizations of the industryin the coming year.

(IV) IMPORTS Vs INDIGENOUS PRODUCTION

India is self sufficient to meet the demands of the market with the GDPprojected at 10 % in the coming decades and in view of theinfrastructure. Facilities going across the region the growth rate ofdemand will increase to meet the expansion of new proposal aremuted.

(V) EXPORT POSSIBILITY

The proposed production of 1.2 MTPA is required for the localdemand and the possibility of export is not there

(VI) DOMESTIC/EXPORT MARKETS

The entire production is envisaged for the domestic market.

(VII) EMPLOYMENT GENERATION (DIRECT AND INDIRECT) DUETO THE PROJECT

JSW will provide employment opportunity for about 185 persons inthis project.

3.0 PROJECT DESCRIPTION

(I) TYPES OF PROJECT INCLUDING INTERLINKED ANDINTERDEPENDENT PROJECT, IF ANY

Not applicable

(II) LOCATION (MAP SHOWING GENERAL LOCATION, SPECIFICLOCATION, AND PROJECT BOUNDARY & PROJECT SITE LAYOUTWITH COORDINATES.

The Plant site is located at Kudikada Village, Cuddalore Taluk,Cuddalore District, Tamil Nadu, India.

The Plant area is a part of the Survey of India Toposheet No.58/M/10. The site falls between 11°41'3.17"N - 79°45'23.25"ENorth latitude and East Longitude with an average altitude of 8 mabove MSL.

Nearest railway line connecting Cuddalore – Chidambaram ofSouthern Railway line is located at a distance of 0.3 km to Westerndirection from the Plant Site. Key map showing the location of variousfeatures around the Plant Site is shown in Fig – 1.

Cuddalore is major town is located at a distance of 4.0 km in NNEdirection.

The National Highway (NH- 532) connecting Cuddalore –Virudachalam is located at a distance of about 1.2 km in Westerndirection.

The State Highway (SH- 49) connecting Cuddalore – Chidambaram islocated at a distance of about 0.05 km in Western direction.

The nearest railway station is located (Capper Quarry )which is 0.5 kmin SW direction.

The nearest railway station is located (Cuddalore )which is 3.5 km inNNE direction.

The National Highway (NH- 7A) connecting Tuticorin – Terunelveli islocated at a distance of about 4.7 km in SE direction.

There are no wild life sanctuaries, national parks, elephant/tigerreserves within 10km radius of the study area.

Nearest Settlements to the Plant Site is Karai Kkadu – 0.5 km – WSW

Nearest Reserved Forest from the Plant Site

None within 10 km radius

Salient features of Plant Site are given in Table – 1 and Fig - 2 showsthe study area of 10 km radius around the Plant Site.

(III) DETAILS OF ALTERNATE SITES CONSIDERED AND THE BASIS OFSELECTING THE PROPOSED SITE, PARTICULARLY THEENVIRONMENTAL CONSIDERATIONS GONE INTO SHOULD BEHIGHLIGHTED.

No alternate site is required to examine as the project is cementgrinding unit based on latest and most eco-friendly technologyThe unit will be is utilizing the slag from steel plant in an eco-friendlymanner.

TABLE – 1.1SALIENT FEATURES OF THE PLANT SITE

Feature DetailsAltitude 8 m above MSLLatitude & Longitude 11°41'3.17"N - 79°45'23.25"EVillage, Tehsil, District,State

Kudikada Village, Cuddalore Taluk, CuddaloreDistrict, Tamil Nadu, India.

IMD Station Cuddalore – 4.0 km - NNEMax. Temp., oC 43.3Min. Temp., oC 11.1Relative Humidity,% 64-84Annual rainfall, 1252 mmTopography Plain

Soil Type Sandy loam

Nearest Water BodiesBay of Bengal – 2.0 km – Eastern Direction

Nearest Highway National Highway (NH-53 B) connecting Cuddalore –Virudachalam is at a distance of about 1.2 km inWestern direction.

State Highway (SH- 49) connecting Cuddalore –Chidambaram is at a distance of about 0.05 km inWestern direction.

Nearest Railway station Cuddalore – 3.5km - NNENearest Industries SPIC Pharma – 0.08 km – ENE

Nearest Village Karai Kkadu – 0.5 km – WSWBird Sanctuary/NationalParks

None within 10 km radius

Nearest Port Chennai – 167.0 km – NNENearest Town Cuddalore – 4.0km - NNEInter State Boundary Tamil Nadu – Andhra Pradesh – 157.0 km - NNWNearest Air port Pondicherry Airport – 32. km – NNENearest Forest None within 10 km radiusHistorical places None within 10 km radius

*all distances mentioned in the above table are aerial distances

(IV) SIZE OR MAGNITUDE OF OPERATION

It is a 1.2 Million Tonnes Per Annum capacity clinker grinding unit.Plant Layout is given as Fig-3

(V) PROJECT DESCRIPTION WITH PROCESS DETAILS (ASCHEMATIC DIAGRAM/FLOW CHART SHOWING THE PROJECTLAYOUT, COMPONENTS OF THE PROJECT ETC. SHOULD BEGIVEN. PROJECT DESCRIPTION AND PROCESS DETAILS:

Cement (PSC); Clinker, slag & Gypsum received through the railwaywagons are unloaded by wagon-tippler and transported through beltconveyor system for storage in Clinker silo, Slag & Gypsum coveredshed respectively.

Slag received in wagons will be dried and ground and mixed withClinker and gypsum for PSC.

Clinker, Slag and Gypsum are subsequently extracted andtransported in definite quantity as per the quality requirements to millfeed hoppers which are then fed to VRM for Grinding through weighfeeder in definite proportion are ground for the production of PortlandSlag Cement

Based on market demand, slag alone will be ground to produce GGBS

The VRM consists of Rollers which rotate on a Grinding table therebygrinding the raw material

In the Cement Silo the cement is homogenised by fluidisation method(for blending) and then extracted through specific equipmentsinstalled and fed to Electronic Roto-Packing Machine for packing inbags. After packing in bags in the packer machines the cement bagsare transported by means of belt conveyor and loaded in RailwayWagons/Trucks by automatic Wagon/Truck Loading machines foronward dispatch to the customer.

FIG-3

THE PROJECT:

JSW Cement Plant comprises the following preparation, processingand handling units:

• Clinker unloading, handling, storing and retrieval system.• Gypsum unloading, handling, storing and retrieval system.

Clinker proportioning and feedingGypsum storage, proportioning and feeding.Clinker and Gypsum Grinding.

• Slag drying and grinding• Ground Cement Handling and storage• GGBS blending, handling and storage• Ground Cement Extraction• Cement Packing• Packed Cement Loading in trucks/ wagons for dispatch.• Complete ancillary system of water, power & pneumatic system.

Different sections/components of the above processing units aretabulated as below:

S.No. Processing Unit Processing Unit comprises Of1 Clinker unloading,

handling, Storing andretrieval system

Wagon tipplers, Belt Conveyor,Clinker Silo, Belt Conveyor, drives,instrumentation.

2 Gypsum unloading,handling, storing &retrieval system

Belt Conveyors, stockpile, drives andinstrumentation.

3 Clinker Proportioning andFeeding

Belt Conveyors, clinker hopper,clinker weigh feeder, bag filters,drives and instrumentation.

4 Gypsum storage,Proportioning andFeeding

Gypsum Reclaimer, belt conveyors,gypsum hopper, gypsum weighfeeder, drives, instrumentation.

5 Clinker and GypsumGrinding

VRM, bucket elevator, air slides,separator, bag filters, VRMauxiliaries (lubrication & coolingsystem), drives and instrumentation.

6 Slag drying and grinding Yard,and silos7 Ground Cement Handling

& storingBucket elevators, Cement Silo, airslides, drives, instrumentation.

S.No. Processing Unit Processing Unit comprises Of8 Ground Cement

ExtractionBlowers, air slides, flow control gates,bucket elevators, instrumentation.

9 Slag grinding High Pressure Grinding Roll Press,Dynamic separator, Bucket elevator,air slides, bag filters

10 Ground Slag (GGBS)blending

Paddle Mixer/ Blender

11 Cement Packing Airslides, bucket elevators, Packingmachines, belt conveyors, bag filters.

12 Packed Cement loading intrucks for dispatch.

Belt Conveyors, Truck loadingmachines, chutes & ducts.

13 Loose (bulk) cement andGGBS loading

Storage Bin, compressed air system,telescopic chutes

14 Complete ancillarysystem of water, power &pneumatic system, firehydrant system.

Overhead & underground watertanks, water Pipe lines, Drainage,Water Pumps, Main sub-station,Transformer & Central Controlsystem. Compressor house,compressor, Air pipe lines & controlsystem

(VI) RAW MATERIAL REQUIRED ALONG WITH ESTIMATEDQUANTITY, LIKELY SOURCE, MARKETING AREA OF FINALPRODUCTS/S, MODE OF TRANSPORT OF RAW MATERIAL ANDFINISHED PRODUCT

Clinker is transported by the railway wagons/trucks from the majorclinkerisation units of JSW situated in Andhra Pradesh/ Tamilnaduor imported from nearby countries through sea route.

PRODUCT AND PRODUCT MIX

Production of Portland Slag Cement (PSC) and Ground GranulatedBlast Furnace Slag (GGBS) is envisaged. Based on the marketanalysis of demand and supply, and in conjunction withtransportation logistics, the proposed production will be as under:

ProductAnnual

Production

1. Portland Slag Cement (PSC)/ Ground GranulatedBlast Furnace Slag (GGBS)Depending upon thematerial availability & Consumer Requirement

1.20MTPA

Types / Grades of CementThere are various grades of Cement and GGBS currently in supply inIndia namely: GGBS, PSC, PPC and OPC.

Sr. Type of Cement Ingredient1. GGBS Slag2. PSC Clinker + Gypsum + Slag

RAW MATERIAL REQUIREMENTS.

No.Raw

material TPA(max.) Source Distance(km)/Transportation

1. Clinker 608475Domestic/

Internationalmarkets

600(Rail)

2. Slag 640500 SAIL, Salem 200(Rail)

3. Coal 7500 Imported 30( trucks)

4. Gypsum 32025Fertilizer

industries/Imported

160 (Trucks)

(VII) RESOURCES OPTIMIZATION/ RECYCLING AND REUSEENVISAGED IN THE PROJECT, IF ANY, SHOULD BE BRIEFOUTLINED

Since the plant is making blended cement and there is substantialreduction in clinker consumption in the cement

(VIII) AVAILABILITY OF WATER ITS SOURCES, ENERGY /POWERREQUIREMENT AND SOURCES SHOULD BE GIVEN

Power: Required power will be supplied by SICOT

Water: Water consumption is 500 m3/day and supply will be bySIPCOT.

(IX) QUANTITY OF WASTES TO GENERATED (LIQUID AND SOLID)AND SCHEME FOR THEIR MANAGEMENT/DISPOSAL)

No solid waste generation from the plant.

Wastewater generation is only from domestic use i.e about 8 m3/dayand the same is treated in septic tanks followed by soak pits.

(X) SCHEMATIC REPRESENTATIONS OF THE FEASIBILITY WHICHGIVE INFORMATION OF EIA PURPOSE

Not applicable.

4.0 SITE ANALYSIS

(I) CONNECTIVITY

The National Highway (NH-45A) connecting Cuddalore – Virudachalamat1.2 km and the nearest railway station is Cuddalore.

(II) LAND FORM, LAND USE AND LAND OWNERSHIP

The present location of the plant is in Kutikadu village. And the arealies in SIPCOT industrial area. About 40 Acres of the area have beenacquired by JSW for operating the grinding unit.

(III) TOPOGRAPHY

It is a flat land with an elevation of 12m above mean sea level.

(IV) EXISTING LAND USE PATTERN (AGRICULTURE, NON-AGRICULTURE, FOREST, WATER BODIES (INCLUDING AREAUNDER CRZ)), SHORTEST DISTANCES FROM THE PERIPHERY OFTHE PROJECT TO PERIPHERY OF THE FORESTS, NATIONALPARK, WILD LIFE SANCTUARY, ECO SENSITIVE AREAS, WATERBODIES (DISTANCE FORM THE HFL OF THE RIVER), CRZ. INCASE OF NOTIFIED INDUSTRIAL AREA, A COPY OF THEGAZETTE NOTIFICATION SHOULD BE GIVEN)

The present location of the plant is in Kutikadu village. And the arealies in SIPCOT industrial area. About 40 Acres of the area have beenacquired by JSW for operating the grinding unit.

There are no wild life sanctuaries, national parks, elephant/tigerreserves within 10-km radius of the study area

(V) EXISTING INFRASTRUCTURE

Adequate infra facilities are available.

(VI) SOIL CLASSIFICATION

Predominantly sandy loamy

(VII) CLIMATIC DATA FROM THE SECONDARY SOURCES.

The average annual temperature is 28.2 °C. At an averagetemperature of 32.0 °C, June is the hottest month of the year. Thelowest average temperatures in the year occur in January, when it isaround 24.4 °C.

Rainfall : Average Rainfall (annual) : 1252 mm

Relative Humidity ; The average daily relative humidity is around 66%.

The prevailing wind speeds range from 37 to 89 km/hr.

SeismicityThe plant will be designed to take care of high seismicitycondition of the area. It lies in Seissmic Zone-II

(VIII) SOCIAL INFRASTRUCTURE AVAILABLE

All infrastructure facilities such as education, health facilities andother social facilities are adequate at nearby commercial area i.e.,Cuddalore.

5.0 PLANNING BRIEF

(I) PLANNING CONCEPT (TYPES OF INDUSTRIES, FACILITIES,TRANSPORTATION ETC) TOWN AND COUNTRYPLANNING/DEVELOPMENT AUTHORITY CLASSIFICATION

The present location of the plant is in Kutikadu village. About 40Acres of the area have been earmarked by JSW for operating thegrinding unit.

The site is well connected by Rail, road and air network.

(II) POPULATION PROJECTIONJSW will provide employment opportunity for about 185 people in thisproject.

(III) LAND USE PLANNING (BREAKUP ALONG WITH GREENBELTETC)

Land use breakup is given in following table:

S.No.

Land Use Area (Acres)

1. Area required for Factory Godown/ OfficeBuilding, Roads and other open spaces.

26.8

2. Garden/ Greenbelt 13.2Total 40.0

Partially developed land will be provided by SIPCOT, Cuddalore.

(IV) ASSESSMENT OF INFRASTRUCTURE DEMAND (PHYSICAL &SOCIAL)

Adequate infrastructure is in place and the project does not require ,further.

(V) AMENITIES/ FACILITIES

All infrastructure facilities such as education, health facilities andother social facilities are adequate at nearest populated area i.e.,Cuddalore

6.0 PROPOSED INFRASTRUCTURE

(I) INDUSTRIAL AREA (PROCESSING AREA)

Infrastructure required for setting up a Cement Grinding unit of 1.2MTPA with allied facilities. The plant buildings/structure will includeclinker silo, gypsum storage, cement mill feed hoppers, fly ash silo,cement mill building, weigh bridge, cement silo, packing plantbuilding & empty bag store, truck loading bay, wagon loadingplatform, wagon tippler, Wagon Shifter ,compressor room, laboratory,technical office, general store, workshop & security office.

(II) RESIDENTIAL AREA (NON PROCESSING AREA)

No Residential colony is proposed

(III) GREENBELT

Greenbelt in an area of 13.2 Acres will be developed inside the plantboundary as per statutory norms.

(IV) SOCIAL INFRASTRUCTURE

JSW has well-defined Corporate Social Responsibility (CSR) policy toCarryout social development and welfare measures in the surroundingvillages. Under CSR activity, JSW has initiated communitydevelopment projects, in the fields of health, education andenvironmental preservation, in and around the plant.

(V) CONNECTIVITY (TRAFFIC AND TRANSPORTATION ROAD/RAIL/METRO/ WATERWAYS ETC)Transport

1 Sea

Nearest sea port is Cuddalore.

2 Rail/Road

The proposed cement grinding plant area has connection with IndianRailway network. The nearest operational rail head is located atCuddalore about 4 km from the JSW plant site. The area is wellconnected by road. Highway NH 45A is passing through the concessionarea.

(VI) WATER MANAGEMENT (SOURCE AND SUPPLY OF WATER)

Water is required for Process and equipment cooling, domestic anddrinking purposes, plantation and greenbelt development, dustsuppression etc. The total water requirement for the above mentionedpurposes will be approx. 500 m3/day and the same will be sourcedfrom Uppanar River.

(VII) SEWERAGE SYSTEM

Wastewater generation is only from domestic use i.e about 8 m3/dayand the same will be treated in septic tanks followed by soak pits.

(VIII) INDUSTRIAL WASTE MANAGEMENT.

No industrial wastewater generation from the process is envisaged.

(IX) SOLID WASTE MANAGEMENT

Dust collected from air pollution control equipment is 100% recycledin process and no solid waste is generated from cement grinding unitplant.

(X) POWER REQUIREMENT & SUPPLY / SOURCE

The power requirement for the project will be 15 MVA and will be willbe sourced from the Tamilnadu state grid (TSEB).

7.0 REHABILITATION AND RESETTLEMENT (R & R) PLAN

(I) POLICY TO BE ADOPTED (CENTRAL/ STATE) IN RESPECT OFTHE PROJECT AFFECTED PERSONS INCLUDING HOME

OUSTEES, LAND OUSTEES AND LANDLESS LABORERS (A BRIEFOUTLINE TO BE GIVEN)

Not applicable, since the proposed project is located in industrialcomplex allotted by the state government and hence R&R is notinvolved.

8.0 PROJECT SCHEDULE & COST ESTIMATES

(I) LIKELY DATE OF START OF CONSTRUCTION AND LIKELYDATE OF COMPLETION (TIME SCHEDULE FOR THE PROJECT TOBE GIVEN)

24 months from the date of obtaining EC.

(II) ESTIMATED PROJECT COST ALONG WITH ANALYSIS INTERMS OF ECONOMIC VIABILITY OF THE PROJECT

Project Cost: Rs. 245 CroresEconomic Viability of the Project: From Finance Institutions andInternal accruals.

9. ANALYSIS OF PROPOSAL (FINAL RECOMMENDATIONS)

(I) FINANCIAL AND SOCIAL BENEFITS WITH SPECIAL EMPHASISON THE BENEFIT TO THE LOCAL PEOPLE INCLUDING TRIBALPOPULATION, IF ANY IN THE AREA

Based on the growing demand in the state, the proximity of the projectlocation to this market is an advantage with respect reduction infreight of cement to these markets. The project is environmentalfriendly as it is using thermal power waste. Considering the above,JSW is planning to go ahead with the project, once it gets all thestatutory approvals.