Centre to get up units for pig iron processing in UP

Worried at the reducing profitability and increasing freight costs of pig iron, being marketed by Steel Authority of India Ltd (SAIL) and Rashtriya Ispat Nigam Ltd (RNIL) in north India, the Union steel ministry is planning to establish pig iron processing plants in Uttar Pradesh to get the benefit of the 15-year tax holiday, offered by the UP government on iron ore imports into the state.

Talking to mediapersons after holding a meeting of senior SAIL and RNIL officials at the SAIL branch office in Agra on Monday, Akhilesh Das, Union minister of state for steel, said there was a demand of 1.5 million tonnes of steel-grade pig iron in North India, which could be handled from the SAIL office in Agra, which was controlling the entire central UP region.

He said now the cost of carrying pig iron processed in the plants located in Orissa, Jharkhand, etc. to the northern states was being burdensome for both SAIL and RNIL and this cost of freight, which was Rs 1,200-1,300 per metric tonne, could be brought down considerably by locating some pig iron processing plants in Uttar Pradesh.

Das said while the move could generate employment in Uttar Pradesh, both the companies could also benefit a great deal from the 100 per cent tax rebate offered by the UP government on the import and processing of iron ore within the state.

He pointed out that due to the large distances involved in carrying the iron ore from the mines located in the eastern states to Uttar Pradesh, it had not been possible earlier to develop steel manufacturing plants in the state but Pig Iron processing plants could be located with much ease and he had asked the SAIL officials to prepare a feasibility survey on the prospects of locating the plants in UP.

He said that at present, the SAIL office at Agra was marketing just 1,500 tonnes of steel, which was considerably lower than the past decade's figures, indicating that there had been quite significant drop in the industrial activities in this region, resulting in a proportionate drop in steel demand.

Later, talking to the mediapersons, SAIL sources said that Swastik Pipes Ltd. located in Kosi and the Foundry units of Agra were the largest bulk buyers of steel in Agra, consuming about 60,000 Metric tonnes of steel every year.