Raw material security must for industrial growth: Tata Steel MD

Says country has an advantage of raw material and needs to leverage on it

Indian metal producers often deal with higher capital, freight and labour cost to set up and operate a greenfield industry and hence, must get raw material supply security to grow, said T V Narendran, Managing director of Tata Steel (India and Southeast Asia) at a seminar here.

“India has an advantage of raw material and we need to leverage on it. If we do not do it, then why would I not set up a steel plant in Japan or Korea and simply import steel to India,” he asked while speaking at ‘National Symposium on Manufacturing and Best Practices to Improve Business Environment’, jointly organised by the Odisha government and the Union government. “These are the issues the government needs to think about as India needs steel plant, manufacturing industries to grow and create jobs,” he added.

In past four months, Tata Steel had to import close to half a million tonne iron ore to run its Jamshedpur steel plant as the Odisha government halted operations at eight of its iron ore mines on direction from the Supreme Court. Earlier this month, the steel major had to suspend operation at its 50,000 a tonne per year ferroalloy plant in Odisha due to supply problem from its chromite mines because of a stay order from the High Court. In both cases, the steel producer suffered due to delay on the part of the state government to clear the company’s mining lease renewal applications.

The Odisha government, meanwhile, has made up its mind to recommend the Centre for renewal of all eight iron ore leases of Tata Steel and has allowed operation at four mines by invoking special provision mentioned in the mining laws. Besides, it has filed a counter in Odisha High Court earlier this week, defending its decision to allot a large chromite bearing area in favour of the steel maker. The matter has been listed to be heard on August 27.

“We hope all the problems related to raw material will get resolved by the end of this year,” said Rajeev Singhal, vice president (raw material) of Tata Steel on the sidelines of the seminar. Tata Steel, which is in the process of setting up a four million a year steel plant at Kalinganagar, said, construction of its Odisha plant would get completed by March 2015, more than a decade after it decided to start the project. The company, however, said such delays are part of the process to start an industry.

“If we do not recognise the fact that a lot of people are getting displaced and are losing land, then we are not going to achieve it, because these things (land acquisition) do not happen overnight,” said Narendran.