The Hindu Business Line : National Steel Policy: Govt to encourage iron ore trading for uniform availability

The policy envisages domestic iron ore consumption will touch at least 190 mt in 2019-20 from the present level of 54 mt to back up steel production of 100 mt from the present 38 mt.

New Delhi , Nov. 11

AS part of its plans to boost domestic steel production to 100 million tonnes (mt) by 2019-20, the National Steel Policy has said that the Government would encourage iron ore trading to make the raw material available throughout the country."Though local value addition would be given priority, the Government would encourage iron ore trading in order to make this raw material available to the iron and steel industry throughout the country. The Government would encourage investments in adding value to iron ore fines," the National Steel Policy 2005 has said.

The policy envisages domestic iron ore consumption will touch at least 190 mt in 2019-20 from the present level of 54 mt to back up steel production of 100 mt from the present 38 mt. During 2004-05, production of iron ore was around 145 mt, of which 54 mt was domestically consumed and 78 mt was exported.

In recent times, there has been a huge interest in the steel sector with domestic majors such as Tata Steel and Essar Steel planning to make fresh investments while global giants such as the Korean company, Posco, have also proposed to set up capacities.

The policy says that Government would encourage investments in creation of an additional modern iron ore mining and beneficiation capacity of 200 mt for which an additional investment of Rs 20,000 crore would be required during the period.

The Government has said that captive mining leases for the private sector would continue, but it was necessary to put in place investment plans for idle mining leases. The policy says that State Governments would recommend renewal of existing leases only against credible mining investment plans in a specified period.

"The Government would lay down priorities and guidelines for the State Governments to fresh recommend fresh mining leases, having regard to the entrepreneur's mining investment plans and technical and financial capabilities," the policy has said.

On export of iron ore, the policy has said that long-term export supply of iron ore would be confined to a maximum of five-year contracts. "A judicious balance (between export and domestic availability) would continue to be maintained between exports and domestic supply of iron ore".The policy document estimates iron ore exports to touch 100 mt by 2019-20 from the present 78 mt. Iron ore export, that had remained virtually stagnant at around 35 mt during 1991-02 to 1999-2000, has shown a major growth since then. However, it is felt that with domestic consumption increasing, the rate of growth of exports would come down.

"As investments are made into beneficiation, sintering and pelletisation in the country, which will use these (iron ore) fines, the growth in exports of iron ore is likely to decline," the policy said.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page