The Hindu : Andhra Pradesh News : Lack of ore security may hit steel plant expansion plans

Online edition of India's National Newspaper
Tuesday, Nov 06, 2007
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Andhra Pradesh

Andhra Pradesh

Lack of ore security may hit steel plant expansion plans

Santosh Patnaik

Centre delaying decision on plea for curbs on exports

VISAKHAPATNAM: Uncertainty over raw material supply may hit the expansion programmes of Visakhapatnam Steel Plant in future unless the powers that be grant captive iron ore mines.

Among SAIL, TISCO and other premier producers of steel, Visakhapatnam Steel Plant is shelling down more towards raw material in its production cost as it has no captive mines.

Applications for lease in AP, Orissa and Chhattisgarh were rejected on various grounds.

VSP sources said there is no shortage of iron ore for the ongoing plan to expand the capacity to 6.3 million tonnes at a cost of Rs.8,600 crores following an arrangement with the National Mineral Development Corporation.

It will face severe crisis for the implementation of stage-II expansion to raise the capacity to the designed level of 10 million tonnes if it is not granted captive mines.

Nearly 100 million tonnes of iron ore is being exported while allowing 55 to 56 million tonnes for domestic consumption.

Ore reserves

India has 11 billion tonnes of good quality haematite iron ore which is most sought-after for blast furnaces.

About 12 billion tonnes of magnetite iron ore is also available in Western part of the county but it cannot be used without enrichment making it unviable.

Though the issue of putting a ban or introducing a ceiling on iron exports was raised by majority at the consultative committee meeting of Ministry of Steel and Mines, the Centre is dilly-dallying a decision.

The iron ore reserves will exhaust once the steel production is raised to 120 million tonnes.

China’s threat

Steel Workers’ Federation of India national president A. Dakshi said the industry has to gear up to face competition from China in the near future. China which has registered phenomenal boom in infrastructure, has raised its steel production to 420 million tonnes.

It will soon achieve 500-million tonne-mark.

It is exporting only 52 to 53 million tonnes using the remaining for construction and manufacturing.

Once it focuses on exports, there will be a price war in India.

“We have to either ban or put curbs on exports so as to enable our steel plants to raise their capacity and compete globally,” veteran trade union leader and CITU president M.K. Pandhe said.

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