Industry body Associated Chambers of Commerce and Industry of India (ASSOCHAM) urged the need to allow steel companies to own captive iron ore resources for sustainable growth and country’s infrastructural development.
All the integrated steel plants capable of undertaking viable, scientific and efficient iron ore mining should be made available captive iron ore mines, according to ASSOCHAM.
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The steel industry and Assocham have been keeping on crying for sops and subsidies for the steel sector and for cheap or 1 Comments
"During the pre-liberalisation era, most steel plants were provided with captive iron ore mines which is the only domestic resource input for competitiveness of steel business," said Assocham secretary general DS Rawat.
Currently, about 65 million tonne per annum (MTPA) steel is produced in India while there is a requirement of nearly 500 MTPA for developing infrastructure. Besides, the industry body demanded a ban on iron ore exports, conserving it for domestic consumption. It had previously raised concerns over government’s decision to impose 26% tax on profits from coal mining saying it will make Indian mining and mineral based industry most heavily taxed and uncompetitive.
The proposed new mining law, Mines and Mineral (Development) Regulation Act, has a provision to share 26% profit by coal miners and 100% royalty by others with the project affected people. The royalty proposal might lead to an annual revenue loss of Rs6,000 crore to the exchequer.
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Readers' Comments
Deepak (Nov 29, 2011) India, India
Indian steel producers lobbying for own benefit at the cost of Govt.
The steel industry and Assocham have been keeping on crying for sops and subsidies for the steel sector and for cheap ore. They have got the Govt. to impose 20% export duty and Rs.2500 railway freight differential on iron ore export to force NMDC to reduce the price to them to that extent basis the flawed import parity formula; causing a huge revenue loss to the Govt. When steel has been open for pvt players in a free market and steel is sold by them to domestic consumers at international prices and coal is imported by them at intl prices, there is no need to provide subsidized ore to them. There is no way India will grow from 65 mill tons to 500 mill tons steel production anytime soon. Despite tall claims of reaching 200 mill tons production by 2011, the steel industry has only grown from 50 mill tons to 70 mill tons in the last 5 years. Japan, Korea and Europe can purchase their entire iron ore and coking coal from overseas buyers and make steel profitably; why cannot Indian steel producers do the same? Let them embrace the China policy where steel mills without captive iron ore and coking coal, purchase the same from the domestic producers at international market related prices and remain competitive in the steel market. This will enable steel producers, iron ore producers, coal producers and steel consumers live together in a mutually beneficial relationship determined by free market policies. Let steel mills compete on equal footing with miners to secure resources. Assocham and the steel producers are crying when the royalty hike and mineral resource tax is implemented but they are the same people who lobbied for increase in export duty on iron ore and high railway freight for export to the detriment of miners and to their benefit, killing the vibrant iron ore export industry which earns good revenue to the nation and tax to the Govt. It is more beneficial for India to export iron ore and import steel as it earns more revenue that way and the sum total of resources is the same, without the attendent pollution caused by steel making.
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COMMENT
The steel industry and Assocham have been keeping on crying for sops and subsidies for the steel sector and for cheap or