India’s steel ministry may acquire land and secure the supply of raw materials such as iron ore for companies seeking to set up large plants with at least 10 million metric tons annual production capacity.
The federal government’s efforts to speed up implementation of projects comes at a time when some big-ticket proposed plants by global giants such as ArcelorMittal and South Korea’s POSCO have been stuck for five-six years due to protests by local people against land acquisition and because of a lengthy approval procedure for mine leases.
“As part of a plan we are looking at, either steel ministry or any of its special companies will acquire land, get mineral linkages and clearances before calling bids from companies to take over the facilities and set up mega steel plants,” Atul Chaturvedi, the federal steel secretary, told a newswire in a recent interview.
He said the blueprint for the so-called ultra mega steel plants will be based on the lines of the ultra mega power projects in the country, wherein an arm of the federal power ministry does all the spade work before calling in bids from investors.
The steel ministry has sought details from the power ministry regarding the process before finalizing the details, Chaturvedi said, without specifying a timeline. However, the steel plants that have already been proposed by companies such as ArcelorMittal may not benefit as the ministry's blueprint would be for new projects.
Chaturvedi also said that delays in land acquisition for two projects of Tata Steel and Essar Steel in the eastern state of Orissa will result in India missing its target to nearly double steel output capacity to 124 million tons by December 2012.
“At best, our steel capacity will be 115 million tons by December 2012, while the rest nine million tons may be staggered over the next six months to one year,” he said.
Chaturvedi said the steel ministry is seeking to increase an export tax on all grades of iron ore to 20 percent to ensure adequate availability for domestic steel producers as most companies have lined up expansion projects.
India currently levies a 5 percent export tax on powdery iron ore fines and 10 percent on high-grade lumps. The country exported 106 million tons of iron ore out of its total production of 226 million in the fiscal year that ended March 31, 2009.
The steel ministry has been pushing for curbing iron ore exports. And in a move that could make India’s iron ore costlier, the state-run railways has increased freight charges on iron ore meant for exports by 300 rupees ($6.7) a metric tonne.
The freight hike is valid until March 31, but iron ore industry executives expect the higher charges to continue in the next fiscal year. While India has abundant reserves of iron ore, it has to depend on imports for high-quality coking coal, another raw material essential for making steel.
Chaturvedi said the steel ministry will approach the federal cabinet within a month for restructuring of International Coal Ventures Ltd, or ICVL. The steel ministry wants ICVL to be made a subsidiary of Steel Authority and remove NTPC and Coal India from the joint venture, he said, adding that the power generating company and the coal producer hardly need to import any coking coal.
The federal government’s efforts to speed up implementation of projects comes at a time when some big-ticket proposed plants by global giants such as ArcelorMittal and South Korea’s POSCO have been stuck for five-six years due to protests by local people against land acquisition and because of a lengthy approval procedure for mine leases.
“As part of a plan we are looking at, either steel ministry or any of its special companies will acquire land, get mineral linkages and clearances before calling bids from companies to take over the facilities and set up mega steel plants,” Atul Chaturvedi, the federal steel secretary, told a newswire in a recent interview.
He said the blueprint for the so-called ultra mega steel plants will be based on the lines of the ultra mega power projects in the country, wherein an arm of the federal power ministry does all the spade work before calling in bids from investors.
The steel ministry has sought details from the power ministry regarding the process before finalizing the details, Chaturvedi said, without specifying a timeline. However, the steel plants that have already been proposed by companies such as ArcelorMittal may not benefit as the ministry's blueprint would be for new projects.
Chaturvedi also said that delays in land acquisition for two projects of Tata Steel and Essar Steel in the eastern state of Orissa will result in India missing its target to nearly double steel output capacity to 124 million tons by December 2012.
“At best, our steel capacity will be 115 million tons by December 2012, while the rest nine million tons may be staggered over the next six months to one year,” he said.
Chaturvedi said the steel ministry is seeking to increase an export tax on all grades of iron ore to 20 percent to ensure adequate availability for domestic steel producers as most companies have lined up expansion projects.
India currently levies a 5 percent export tax on powdery iron ore fines and 10 percent on high-grade lumps. The country exported 106 million tons of iron ore out of its total production of 226 million in the fiscal year that ended March 31, 2009.
The steel ministry has been pushing for curbing iron ore exports. And in a move that could make India’s iron ore costlier, the state-run railways has increased freight charges on iron ore meant for exports by 300 rupees ($6.7) a metric tonne.
The freight hike is valid until March 31, but iron ore industry executives expect the higher charges to continue in the next fiscal year. While India has abundant reserves of iron ore, it has to depend on imports for high-quality coking coal, another raw material essential for making steel.
Chaturvedi said the steel ministry will approach the federal cabinet within a month for restructuring of International Coal Ventures Ltd, or ICVL. The steel ministry wants ICVL to be made a subsidiary of Steel Authority and remove NTPC and Coal India from the joint venture, he said, adding that the power generating company and the coal producer hardly need to import any coking coal.
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