The Steel Ministry foresees a raw material supply crunch due to environmental constraints, mining caps, inadequate infrastructure to move iron ore, and the strain on overall reserves position.
A Ministry report ‘Long-Term Perspectives for the Indian Steel Industry’ says that if the target of 300 million tonnes of crude steel making capacity by 2025-26 is to be achieved, the country will have to work towards greater exploration, raising mining capacities and developing infrastructure, or else brace up for significant exports. The report also says the supply crunch will hit producers without captive mines, who will have to depend on small merchant markets.
“In the absence of an export market and continued policy push for value addition, the merchant iron ore mining industry will go for value addition and consume much of the iron ore themselves. This will complicate the supply line further,” the report stated.
As per Ministry estimates, the projected ore demand by 2025-26 will be 346 mt, assuming an 8 per cent growth in GDP.
The Ministry has thus recommended a relook at the policy framework to enable the steel industry to capitalise on the domestic resources and turn it into a competitive advantage.
“Given that exploration efforts have been limited due to various constraints there are not enough mines to be allocated on captive basis to the new generation of steel producers,” the report states.
“Further, with the State Governments holding priority in allocating mines either to their own PSUs, the aggregate benefits from this policy framework will be limited.”
Similar concerns have also been raised about the shortage of coking coal in the country. But, despite the supply concerns of raw material for the steel industry, the Ministry said mega steel projects need to be set up in States such as Jharkhand, Chhattisgarh and Odisha to reach the 300 million tonne production target by 2025-26.
“For realising the national mission of having steel capacity of 300 mt by 2025-26 an additional steel production capacity of 176 mt per annum in the eastern sector and 26 mt a year in the rest of the country is required,” the report said.
The additional capacity will generate 3.15 lakh of direct employment, the report added.
- metaljunction »
- Metal News
Metal News & Events
Coal Insights (English) Monthly
Coal Insights is a ready reckoner for anyone associated with coal. This publication is aimed at tracking everything related to coal in India.
India Coal Market Watch(English) Monthly
ICMW is a one-stop source for all news, data and research pertaining to coal demand, consumption, stocks, spot- and long-term prices with respect to the Indian Market.
ISMW is a brand new high-end steel market report, covering all aspects of the steel industry in India.
Steel Insights(English) Monthly
Steel Insights delves into various facets of the domestic and global steel industry such as market fundamentals, raw material price trends, price forecasts etc.