Sajjan Jindal, chairman and managing director of JSW Steel, says exports will soar because of the depreciation of the rupee, while opposing the reported move to lower duties on iron ore exports. In the course of an interview, Jindal criticised tribal affairs minister KC Deo for supposedly seeking to keep tribal communities in a primitive state. He also said vested interests are preventing growth in exports
The chairman and managing director of JSW Steel, Sajjan Jindal, feels the political leadership is weak, NGOs are being instigated to create roadblocks, and the media hypes the issue, adding to the pressures. 'We have coal in our country. We are now importing 200 MT of coal. We are a poor nation and we can’t meet our energy requirements based on imports. We have coal deposits with us, which will last us for more than 100-200 years.'
Is the manufacturing sector taking advantage of the weakened rupee?
The devalued rupee is a huge fillip. Last year, we exported 1.5 million tonnes of steel. This year, we may cross four million tonnes. Everybody I was speaking to from my peer group, including Bharat Forge’s Baba Kalyani, are all cranking up their manufacturing plants. We are 22% more competitive today because of the depreciating rupee. Steel is a global commodity. India is not a player of significance in the global market. The total steel traded is 150 million tonnes a year. Japan does 60 million tonnes, South Korea does 30 million tonnes and India does 4 million tonnes. And this year we may do 10 million tonnes.
So, where are these exports happening?
For the first time in our history we are exporting to South Korea and Japan. After a gap of 10 years we are exporting again to China. We are also exporting to Europe and the US.
Doesn’t China have an over-capacity?
Today, they are not exporting steel. They are consuming all their steel. Suddenly, the Chinese demand has picked up and their economy seems to have again revived. They consume 10 times more steel than what India consumes.
Do you agree that much of India Inc’s problems are its own making?
Inter-corporate rivalry in the corporate sector brings its own pressures in Delhi. You instigate the NGOs and the media picks it up. They hype it up. The judiciary picks it up and does their bit. Then pressure builds up and investigative agencies get into the act. And, because the leadership is weak, every agency overreaches. We have so much of coal in our country (referring to the fallout of the Coalgate scam). We are now importing 200 million tonnes of coal. We are a poor nation and we cannot meet our energy requirement based on imports and we have so much coal deposits lying with us. It will last us for more than 100-200 years. And, coal will lose its relevance in 50 years and it will not be needed because new competing technologies such as nuclear, solar and wind will become more competitive.
Your industry has seen a lot of activity from NGOs. Is it inter-corporate rivalry?
The civil society is needed in every economy. They are a balancing act. They are not there in China. But, at times, they say no tree must be cut and that tribals must remain tribals. Please ask them whether the tribals want to remain a tribal. The poor tribal does not know. He wants status quo. The case in point is Anil Agarwal’s Vedanta Resources in Niyamgiri. It's a real disaster for all of us.
Who is behind such NGOs?
There are inter-corporate rivalries and international ones.
International?
India is a country which is best placed to produce aluminium in the world. Two states — Andhra Pradesh and Odisha — are best suited for this. We have the best quality bauxite in the world. We have the largest reserves in steam grade low-quality coal in the world and the cheapest. These are the two key inputs to make aluminium. And, we have abundant manpower, who are keen to have jobs and we have enough water. China never had bauxite and imports coal and produces 20 million tonnes of aluminum and India produces less than two million tonnes of aluminium.
Are the Chinese behind this?
No. It is the Canadians and the Americans. This has been going on for the last fifty years. They don’t want this. Late Aditya Birla used to openly say it before. Everything is done by the big multinational aluminum companies. It is so cheap to do this. Just imagine you hire 20 NGOs to support them through another NGO. All the names are available.
Which international NGO supports which NGO in India?
The NGOs in America and Canada feed 20 NGOs. They spend 40-50 crore a year. They’ll ensure that no aluminum project will come up in India.
What happened to JSW Aluminium. Have you shelved it?
Yes, we have shelved it. Because our tribal affairs minister says tribals must remain tribals. I can’t understand it. We have done everything and everyone supported us. We have done gram sabhas, acquired land, given shares of our land to land losers in Andhra Pradesh. The mining will be done by APMDC and the product will be sold on a cost-plus basis, which is an international concept. Royalty will be paid at international levels. Moreover, not a single tree is to be cut during mining activity. So, there’s no ecological impact from the mining. The Supreme Court has approved it and the green bench has approved it. But now (Krishna Chandra) Deo says tribals will be affected. How will they get affected? Let tribals operate this and get all the money.
There is a feeling that to strengthen the rupee, one should open up iron ore exports? Are you in favour?
Not at all. India used to export 120 MT. Goa used to export 50 MT. Karnataka exported 40 MT and 30 MT was exported by Chhattisgarh, Jharkhand and Odisha together. Today, Goa is shut for exports, and Karnataka is also shut, because of low production and Odisha is constrained because of the Shah Commission and so, the total mining activity currently is 140 MT. If you open up exports again the same thing will happen. The same corruption episodes will recur. At 100 MT of export, India will earn $10 billion. Instead, if we export 10 MT of steel, it will mean $8-9 billion. Which is equivalent to the iron ore exports at its peak. Right now, there is no ban on iron ore exports. In Karnataka, Supreme Court has said don’t do over-exploitation of natural resources and they have capped iron ore mining to 35 million tonnes. Therefore, Karnataka will never be exporting. So, what this mining lobby is trying to push is the 30% disincentive as duty on export of iron ore, which the government wants to cut.
The chairman and managing director of JSW Steel, Sajjan Jindal, feels the political leadership is weak, NGOs are being instigated to create roadblocks, and the media hypes the issue, adding to the pressures. 'We have coal in our country. We are now importing 200 MT of coal. We are a poor nation and we can’t meet our energy requirements based on imports. We have coal deposits with us, which will last us for more than 100-200 years.'
Is the manufacturing sector taking advantage of the weakened rupee?
The devalued rupee is a huge fillip. Last year, we exported 1.5 million tonnes of steel. This year, we may cross four million tonnes. Everybody I was speaking to from my peer group, including Bharat Forge’s Baba Kalyani, are all cranking up their manufacturing plants. We are 22% more competitive today because of the depreciating rupee. Steel is a global commodity. India is not a player of significance in the global market. The total steel traded is 150 million tonnes a year. Japan does 60 million tonnes, South Korea does 30 million tonnes and India does 4 million tonnes. And this year we may do 10 million tonnes.
So, where are these exports happening?
For the first time in our history we are exporting to South Korea and Japan. After a gap of 10 years we are exporting again to China. We are also exporting to Europe and the US.
Doesn’t China have an over-capacity?
Today, they are not exporting steel. They are consuming all their steel. Suddenly, the Chinese demand has picked up and their economy seems to have again revived. They consume 10 times more steel than what India consumes.
Do you agree that much of India Inc’s problems are its own making?
Inter-corporate rivalry in the corporate sector brings its own pressures in Delhi. You instigate the NGOs and the media picks it up. They hype it up. The judiciary picks it up and does their bit. Then pressure builds up and investigative agencies get into the act. And, because the leadership is weak, every agency overreaches. We have so much of coal in our country (referring to the fallout of the Coalgate scam). We are now importing 200 million tonnes of coal. We are a poor nation and we cannot meet our energy requirement based on imports and we have so much coal deposits lying with us. It will last us for more than 100-200 years. And, coal will lose its relevance in 50 years and it will not be needed because new competing technologies such as nuclear, solar and wind will become more competitive.
Your industry has seen a lot of activity from NGOs. Is it inter-corporate rivalry?
The civil society is needed in every economy. They are a balancing act. They are not there in China. But, at times, they say no tree must be cut and that tribals must remain tribals. Please ask them whether the tribals want to remain a tribal. The poor tribal does not know. He wants status quo. The case in point is Anil Agarwal’s Vedanta Resources in Niyamgiri. It's a real disaster for all of us.
Who is behind such NGOs?
There are inter-corporate rivalries and international ones.
International?
India is a country which is best placed to produce aluminium in the world. Two states — Andhra Pradesh and Odisha — are best suited for this. We have the best quality bauxite in the world. We have the largest reserves in steam grade low-quality coal in the world and the cheapest. These are the two key inputs to make aluminium. And, we have abundant manpower, who are keen to have jobs and we have enough water. China never had bauxite and imports coal and produces 20 million tonnes of aluminum and India produces less than two million tonnes of aluminium.
Are the Chinese behind this?
No. It is the Canadians and the Americans. This has been going on for the last fifty years. They don’t want this. Late Aditya Birla used to openly say it before. Everything is done by the big multinational aluminum companies. It is so cheap to do this. Just imagine you hire 20 NGOs to support them through another NGO. All the names are available.
Which international NGO supports which NGO in India?
The NGOs in America and Canada feed 20 NGOs. They spend 40-50 crore a year. They’ll ensure that no aluminum project will come up in India.
What happened to JSW Aluminium. Have you shelved it?
Yes, we have shelved it. Because our tribal affairs minister says tribals must remain tribals. I can’t understand it. We have done everything and everyone supported us. We have done gram sabhas, acquired land, given shares of our land to land losers in Andhra Pradesh. The mining will be done by APMDC and the product will be sold on a cost-plus basis, which is an international concept. Royalty will be paid at international levels. Moreover, not a single tree is to be cut during mining activity. So, there’s no ecological impact from the mining. The Supreme Court has approved it and the green bench has approved it. But now (Krishna Chandra) Deo says tribals will be affected. How will they get affected? Let tribals operate this and get all the money.
There is a feeling that to strengthen the rupee, one should open up iron ore exports? Are you in favour?
Not at all. India used to export 120 MT. Goa used to export 50 MT. Karnataka exported 40 MT and 30 MT was exported by Chhattisgarh, Jharkhand and Odisha together. Today, Goa is shut for exports, and Karnataka is also shut, because of low production and Odisha is constrained because of the Shah Commission and so, the total mining activity currently is 140 MT. If you open up exports again the same thing will happen. The same corruption episodes will recur. At 100 MT of export, India will earn $10 billion. Instead, if we export 10 MT of steel, it will mean $8-9 billion. Which is equivalent to the iron ore exports at its peak. Right now, there is no ban on iron ore exports. In Karnataka, Supreme Court has said don’t do over-exploitation of natural resources and they have capped iron ore mining to 35 million tonnes. Therefore, Karnataka will never be exporting. So, what this mining lobby is trying to push is the 30% disincentive as duty on export of iron ore, which the government wants to cut.
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