India eyes 2nd steel maker slot; SAIL to invest Rs 1.5 trillion
The government is also making efforts to “infuse life” into the country’s mining sector that has been left behind other countries due to under exploration, said the Minister for Steel and Mines.
A Special Purpose Vehicle (SPV) dedicated to the steel industry in being worked upon, Tomar said at a press conference here. “In the first phase, we plan to establish steel plants through the SPV route in Chhattisgarh, Odisha, Jharkhand and Karnataka,” he said.
SAIL’s steel plants are being expanded from a capacity of 13 million tonnes per annum to 23 MTPA, at an investment of Rs 61,000 crore. The <g data-gr-id="43">long term</g> plan is to take SAIL’s capacity up to 50 MTPA by 2025, at an estimated investment of Rs 1,50,000 crore, he said. Tomar added: “As per World Steel Association figures for the period January-April 2015, India has become the third largest steel producer in the world leaving behind the US. Our target is to reach <g data-gr-id="48">second</g> position in the by 2020.” The minister further said, “Despite being a <g data-gr-id="47">mineral rich</g> country, India has not been able to register its mining presence on a global scale. In contrast, geologically similar countries such as Australia and Canada have left India far behind in the mining sector. The major reason for this backwardness is under exploration.”
He added that efforts are on to infuse life into the mining sector of the country by amending the Mines and Minerals Development and Regulation (MMDR) Amendment Act 2015. “By amending the Act, we have introduced auction as the only way to grant mining concessions, which is bound to bring transparency, fair play and clarity in the concession process. This will boost investor confidence and incentivise investment in this sector,” he said..
Tomar said it is worth mentioning that in 66 years of independence, no government spent resources on the welfare of people and places affected by mining and these areas had suffered neglect and no mechanism was evolved to cater to their needs. “The present government has provided for <g data-gr-id="45">establishment</g> of District Mineral Foundation (DMF), with the express purpose of increasing the standard of lives of mining affected people,” he added. Answering a query about attacks on law enforcers by illegal mining mafia in Madhya Pradesh, he said this shows that the state machinery is acting against illegal miners and that Madhya Pradesh has taken a tough posture against illegal mining.
On the first year of the NDA government, he said the gloom which prevailed during the previous UPA rule has given way to positivism and enthusiasm. He said that when the NDA government, headed by Prime Minister Narendra Modi, took over the reins of the country, economic growth was at around 5 <g data-gr-id="41">per cent</g>, which has now risen to 7.4 per cent within an year, he said. The minister further said that decision making has become quick under the NDA government. He said that no case of corruption has come to light during the NDA government’s one-year rule.
58% rise in imports; consumption up 6.8%
India’s steel imports surged 58 <g data-gr-id="95">per cent</g> in May to about a million tonne, indicating tough times are here to stay for domestic producers facing price pressures and cheap imports from countries like China and Korea.
On the other hand, what appears to be a silver lining for the industry, steel consumption grew 6.8 <g data-gr-id="94">per cent</g> year-on-year to 7.23 million tonnes (MT) last month.
In May 2015, steel imports stood at 0.91 MT, a rise of 58 <g data-gr-id="90">per cent</g>, compared to April 2015 when they rose by 20.4 per cent, as per data by the Joint Plant Committee (JPC), under the Steel Ministry. For the first two months of the 2015-16 fiscal, India was a net importer of steel with <g data-gr-id="91">in-bound</g> shipments growing by 54.5 <g data-gr-id="92">per cent</g> to 1.67 MT, compared to April-May of 2014-15. Similarly, imports grew 71 <g data-gr-id="93">per cent</g> to 9.32 MT in 2014-15 as compared to 2013-14, making India a net importer of steel.
According to rating agency Moody’s, steel imports are not expected to come down in the current fiscal ending March 2016.
Last week, India slapped anti-dumping duty on imports of certain steel products from three countries, including China, to protect domestic producers, a development that is expected to help contain the rising imports of the metal.
An investigation by Directorate General of Anti-Dumping Duty (DGAD) concluded that <g data-gr-id="99">domestic</g> industry suffered <g data-gr-id="100">material</g> injury, both by the volume and price effect. Another positive development is rising steel consumption, which has been registering a gradual increase and is expected to help shore up the top and bottom line of domestic firms.
India’s consumption of total finished steel rose by 6.8 per cent to 7.234 MT in May, 2015 against the year-ago period. It was up 31.3 <g data-gr-id="96">per cent</g> against April, 2015, JPC data showed. Steel consumption saw a growth of 7 per cent in April-May 2015-16 at 12.742 MT over <g data-gr-id="103">same</g> period of last year, it added.