Inter ministerial group on steel to meet on Oct 8

NEW DELHI: An inter-ministerial group, set up to fructify various projects in the steel sector, will meet within 10 days to address bottlenecks impeding the estimated investments of Rs 2,76,880 crore in the next five years.

"We envisage an investment of Rs 2,76,880 crore in the steel sector by 2011-12. The IMG, which has been constituted to delve into various issues impeding these investments, will deliberate on them when it meets on October 8," a top Steel Ministry official told media.

The key issues to be discussed are ensuring adequate iron ore resources to the steel utilities, including foreign steel giants like ArcelorMittal and Posco, who have announced major investments in Jharkhand and Orissa.

"After a detailed scrutiny of the current steel scenario, we found that steel production by 2012 is likely to be at 124.06 million tonnes per annum. This will necessitate 198 MT of iron ore by the same period and 438 MT by 2019-20," the official pointed out.

Companies which have announced investment plans in the sector have made it clear that they would require iron ore mines to carry out greenfield and brownfield expansions, he said.

"The proven reserves of the country should be leveraged to meet the raw material requirement of the promised investments and fructify capacity addition," the official reasoned.

The group will also discuss the issue of allowing private investments in areas like creating railway infrastructure including procuring and operating rolling stock, the official said. The possibility of opening up more coal blocks for major steel projects and seek their expeditious allocation will also be discussed by the group. Various steel companies have sought allocation of coal blocks in Jharkhand, Orissa and Chhattisgarh.

Steel Authority of India Ltd (SAIL) has sought Mandakini, Fatehpur East, Ganeshpur and Gourangdih blocks, while ArcelorMittal has sought Mandakini and Rampia Dipside of Rampia for its proposed captive power plants in Orissa and Ganeshpur and Saragarha blocks for the Jharkhand project.

"Environmental issues impeding the investments will also come up for discussion. Present environment clearance policy needs amendment for faster and transparent clearance of mega projects," the official said.

SAIL is awaiting environmental clearance for Budhaburu, Dhoil and Singhbhum (W) for the past three years.

Major steel utilities have announced massive capacity expansions. SAIL is carrying out its modernisation programmes to ramp up its production capacity to more than 24 million tonnes, while Rashtriya Ispat Nigam Ltd (RINL) is executing a corporate plan to increase production capacity to more than 6 MT by 2011-12.

Besides, Tata Steel has announced plans to increase production to 13 MT from the current 5 MT, while Essar Steel will up its capacity to 14.5 MT from the current 4.6 MT and JSW to 11 MT from current 4.1 MT, he said. Among the greenfield projects pledged by steel utilities are 3 MT by Tata Steel, 6 MT by Essar, 5 MT by BSPL, 1 MT by Monnet Ispat.