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The Ministry of Steel has proposed to set up special purpose vehicles (SPV) with State Governments to revive investment in the steel sector.
The role of the SPVs will be to acquire land and obtain all necessary environment and forest clearances, G Mohan Kumar, Secretary, Ministry of Steel, said at an event organised by the Indian Chamber of Commerce on Thursday.
“After SPVs do all the preparatory work for setting up new steel plants, we can invite steel makers and hand over the project to them in a transparent manner,” Kumar added.
NMDC Ltd, a public sector unit under the Ministry of Steel, will be the company creating the SPVs. The SPVs will be created in the mineral-rich States of Karnataka, Chhattisgarh, Odisha and Jharkhand.
The move comes as greenfield capacity for steel manufacturing has virtually halted. Projects of South Korean steel maker Posco and the world’s largest steel maker ArcelorMittal has not taken off even after 10 years since the companies expressed intentions to build steel plants in India.
However, despite the efforts, the Steel Ministry still expects a slow offtake in greenfield projects.
“Brownfield expansion will be the major area of growth in steel manufacturing capacity addition in the next 8-10 years,” said Kumar.
Meanwhile, the Steel Ministry is also proposing Special Mining Zones, where regions with mineral resources will be identified as strategic resources and one nodal authority will arrange necessary green clearances for mining projects in such areas.
“We have floated the idea of Special Mining Zones. It is something we want to do but it needs a lot of deliberations. I don’t know if we would be successful or what form it takes at the end of it. But we are working towards the idea,” said Kumar.
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