Steel scenario in India. Mr V R Sharma Dy MD & CEO

Transcription

1 Steel scenario in India Mr V R Sharma Dy MD & CEO

2 Inadequate Survey & Exploration Lack of Private Participation in Survey & Exploration Actual Explored Reserves and Total Investment too small Exploration is mainly done by Government agencies like Geological Survey of India & State Geological Departments Till now, only 10 per cent of the total available mineral reserves in India have been explored whereas in countries like Australia, South Africa, Canada, Germany more than 80% geophysical and geochemical surveys are done. As per international norms, investment in exploration brings 15 to 20 times returns. Hence there is ample scope to involve multiple agencies in exploration. The Budget for Mineral Exploration must be increased so that India s share in Global Exploration must increase from 0.5 % to 5% in the next 5 years compared to Canada, Australia and South Africa having more than 15% share individually. (Source E&Y Report, Exploring India)

3 Complex procedures resulting in delays Grant of forest clearance, Environment clearance, Mining lease, etc Mines Must be allotted more Rationally Mines allotment should be done on First Invest First Serve basis and not on First Cum First Serve basis Commitment of giving mines can be done upfront, but mining lease should be given only after 50% investment is completed by the investor. The Steel Plants who have already invested money should be given priority based on investment. The smaller MoUs should be re evaluated because the smaller plant would suffer on account of Non Availability of Economy of Scale. Consolidation of smaller MoUs into bigger conglomerate by inviting them to form a collaborative approach to make their plant sizable, i.e. minimum 3 MTPA at one location. Forest Clearance becomes an impediments many a times. Investors must be encouraged to develop the Forest in existing forest or Afforestation in new locations and Forest clearance sould be given against an undertaking to complete the Plantation in 2 3 years to ensure no delay in Project work

4 Land Acquisition delays No Govt Support for Land Acquisition even after majority land acquired Recurring disturbance with emotional quotient attached to land in India Policy to safe guard industry to be formed and each investor must be given Priority Pass which should ensure respect to investors and should minimize the official hurdles Government must create a body to bring the Land Owners and investor on one platform for conducive and meaningful negotiations. The interest of the Industry should be protected, once the land sellers are paid the compensation is provided and rehabilitation is done as per the state government policies.

5 Rail and Road Infrastructure Increased Rail Freight making deep holes in the Consumers pockets Congestion due to Slow development of new Rail Lines and Wagons Efforts must be made by Railway Ministry to make transportation by Railways as the most lucrative mode of transport for Bulk material New Tracks must be laid to give an impetus to the growth of Railway. Replacement of the old & worn out Tracks, increasing Rolling stocks & Wagons should be planned Planning for Mega Rake Dispatches where 10,000 MT of Raw Material can be dispatched in One Rake should be done, as available in countries like Brazil and South Africa. Presently in India, maximum load a rake can take is 4,000MT Private Participation is a must to fund the Railway Projects. Each Steel plant, Cement Plant, Thermal Power Plant, etc should be allowed to invest in Rolling Stock, so that more number of rakes are available for the movement of Bulk Material

6 The Railway Network has not increased in proportionate to the growth of the Steel Industry 1 unit steel production requires 4 units of material movement

7 Shortfall of skilled manpower Fresh Managers, Engineers, ITIs, moving towards IT Industry Semi Skilled & Unskilled Labour moving to cities for easier jobs Private Sector must be encouraged to open community colleges and Industrial Training institutes to develop skilled work force/technicians Specialized Steel University should be opened in the Country to teach special courses on Steel Making Tax Benefits for establishing Design institutes and Machine Building Facilities should be extended to Indian Industry

8 Industry Responsibility : Raw material Iron Ore Develop improved Iron Making processes like Hismelt, Fastmet, Finex, ITmk3 Ensure Iron Ore Beneficiation and Pelletization to improve utilization factor Million Tons Production and Consumption Production Export Import Consumption Coal Coal India Ltd must increase the mining of Coking Coal and sell in open market to reduce importing of same eroding the competitive position of Indian Steel Industry Investors must be invited to put up washeries and beneficiate the coal. Similarly Coal to Gas projects must be encouraged to minimize emissions and increase the coal availability for DRI making 0 FY 07 FY 08 FY 09 FY 10 FY 11 Production and Consumption Source: Production & Consumption Indian Bureau of Mines; Export & Import Ministry of Commerce

9 Indian Steel Scenario : 2020 Demand in MnT Supply in MnT Vision 2020 of Indian Growth requires 200MnT of Steel Supply Growth Rate in the last 5 years was 5% Gap between Demand & Supply in 2020 with 5% Growth rate would be 55 MnT 8% Growth Rate would be 30 MnT

10 Expected Indian Steel Scenario : 2020 From the above discussion, India would be short of Steel by almost 30 MnT if corrective measures are not taken now.

11 Thank You