India Must Address Structural Issues To Reach 300 Mt: Jspl Chief

To reach the target of 300 million tons (mt) of steel production by 2030, India needs to address some structural issues like logistics and raw material availability, N A Ansari, CEO, Steel, Jindal Steel & Power (JSPL), said while making a presentation at the Indian Steel Association (ISA) conclave, held recently in New Delhi.

Steel traffic: Steel-related traffic, mainly land-based transport, is set to increase as majority of the steel capacity is coming up in the eastern and central parts of the country. Higher capacity creation is in favour of iron ore rich regions – east and central – in particular. However, rail network and other infrastructure is not keeping pace with steel capacity addition. This has led to under-utilised plants. Sometimes, the situation becomes worst due to diversion of rakes in favour of power plants. Underutilization of assets is leading to investments remaining under risk, Ansari said.

Raw material: Raw material availability at affordable prices is also an issue owing to likely shortage of iron ore and other major minerals post-2020. Around 97 mining leases on pan-India basis are going to lapse by 2020. In Odisha alone, non-captive mining leases of capacity 67 million tons per annum (mtpa) will lapse and may create a huge demand-supply gap. Suitable amendment in Rule 18 of MCR, 2016 may be made so that aforesaid leases may be auctioned prior to lapsing. Ensuring availability of higher number of mineral blocks for auction and review of high royalty rate on iron ore needs to be done, he said.

High dependency on merchant miners for end-users: More than 75 percent of the steel in India is produced from purchased ore with consequent dependency on merchant miners. Few major miners control the supply and pricing of iron ore in the entire domestic market. Thus, holding of separate auctions of iron ore for end-users is required.