India to become 2nd largest steel producer by 2013
The Union Minister for Steel, Beni Prasad Verma said that India will become the world’s second largest producer of steel by 2013. With an installed annual production capacity of 120 million tonnes up from the present 80 million tonnes, India expects to grab the second spot. Addressing the 5th India steel Summit in New Delhi, he said that currently India has the fourth largest steel sector in the world, both in terms of capacity and production. The capacity is expected to be over 150 million tonnes by 2020. “By 2013, India will be the second largest steel producer in the world riding on the high levels of growth in construction, housing, real estate, automobiles and agriculture. Currently, steel demand in the country is growing at an average rate of 10%, which may exceed even 12% in near future. In order to meet the demand from domestic consumers, steel production capacity in India must increase at average rate of 10 to1 5%. We have, therefore a challenging task ahead of us in setting up the desired capacities, within the shortest possible time,” Verma said.
India is endowed with significant iron ore reserves, estimated at 25 Billion tonne. However, the proven economically mineable reserve is only 7 billion tonne, of which the high reserve grade is only 1.3 billion tonne. Considering we will be producing more than 200 million tonnes of steel in another 10 years, there is an urgent need to conserve our scarce natural resources. “As a matter of policy we have taken fiscal measures in imposing 20% duty on export of all kinds of iron ore. This is expected to encourage domestic value addition in the country. Also in order to encourage better utilization of iron ores fines, export duty on Pellets has been exempted in the last budget,” he added.
There are a large number of projects currently in the pipeline including the major ones such as expansion plan of SAIL, RINL, Tata, Essar, JSW and JSPL. A number of green-field projects are also at different stages of progress including the large foreign investment projects such as Posco and Arcellor-Mittal.
The Minister said that the land acquisition has become a major challenge. “Steel investors need thousands of acres of land for setting up their projects. Acquisition of land without ensuring adequate compensation, rehabilitation and employment, has already generated massive unrest and protests, in various parts of the country. However, land is also essential for any industrial development activity. To maintain the fine balance, Government is seriously working on a new Land Acquisition and Rehabilitation Bill. I hope this will be finalized very soon, he added.