The Govt. of India under the ablest leadership of the then Prime Minister Pt. Jawaharlal Nehru, decided to set up large Steel Plants by the Govt. itself after the general election of 1952. Rourkela and its adjacent areas are rich in iron ores, manganese, dolomite and limestone’s, the basic materials for production of iron and steel. Considering Rourkela to be best place for a steel plant, the survey work was completed in the year 1954. The infrastructure work of the plant was accomplished in between 1955 and 1960. Almost thirty-two villages were alienated and the people of the villages were resettled. 
The Republic of Germany extended technical knows how for the construction of the steel plant and the plant was considered a joint venture of the Government. Of Indian and Germany. The initial production limit of one million tones steel per annum was raised to 1.8 million tones in the subsequent years. The internationally reputed firms like the KRUPP, DEMAG, G.H.H. Sag, Scholomen, SIEMENS and VOEST ALPINE etc. Supplied different machines and machinery parts to the plant at the beginning stage. The Rourkela Steel Plant took the part of leadership in the process of steel production under L.D. techniques. It could also established itself as one of the premier industries of the world under the system of basic oxygen converter.The extension work of the plant was over by the year 1968. A circular welding pipe plant and special plate plant were set up in the decade of seventies for production of different ready-made materials. To avoid scarcity of power supply the plant set up a power plant by itself with a capacity of 120 MW. The power plant is able to cater the requirement of power supply from the year 1986.The modernization of Rourkela steel plant was begun in the month of August 1988 with a view to producing qualitative materials and establishing its importance in the world market.
The process of modernization entailed an expenditure outlay of rupees 4500 cores. Some nine main packages including some ancillary packages were executed at the first phase. This phase revamped the process of supply of raw materials, new oxygen plant, improved techniques in blast furnaces, selling of dolomite plant, Cast house slag glandular plant, supply of raw materials two number of Sintering plant and coal handling plants etc.Similarly with the implementation of some sophisticated systems in the second phase of modernization Rourkela Steel Plant could get the status of a modern industrial unit in the world.The materials being produced from the Steel Plant are steel in ingots, iron sheets, ultra thin plates, electric steel plates, cold rolled coils, hot rolled coils, tin plates and different kinds of pipes etc. The by-products of the plant are fertilizer “Sona”, bitumen and benjol etc.