Incorporated at Patna, Bihar, on 16 April, 1982, Bihar Sponge Iron Limited is an IndoGerman venture, promoted in the joint sector by Modi Industries, Modi Rubber and their associates, along with the Bihar State Industrial Development Corporation Ltd. (BSIDC) and Lurgi, Germany. It is the first merchant sponge iron plant in India. The plant is located in Saraikela Kharsawan, Jharkhand.The company produces sponge iron from iron ore (inst. cap. : 1,50,000 tpa). Sponge iron is used as a raw material for making steel in electric arc furnaces and induction furnaces, substituting and supplementing indigenous and imported scrap.. It has a technical collaboration with Lurgi, Germany, for technical knowhow.The Plant started commercial operations in 1989. In Aug.90, the Company came out with a rights issue. The Companys net worth eroded more than 50% from the peak during the last four financial years, as a result, it was referred to BIFR and was declared sick. IFCI was appointed as the operating agency, for preparing a rehabilitation scheme.The company is putting up a Captive Power Generating Unit, which will utilise the Coal Fines generated from the operations. The commissioning date of the plant has been changed from April 2001 to March 2002. It also commissioned 5 MW Captive Power Plant in 200203.