Steel policy eyes high output target

The National Steel Policy, being prepared by the steel ministry, is believed to have set a domestic production target of 60 million tonnes by 2010 and 200 million tonnes by 2020, up from the present 32 million tonnes.

According to sources involved in the drafting of the policy, the government has sought inputs from steel makers on their current capacity, future expansion plans, capital expenditure and available infrastructure.

They said the policy was being formulated keeping in view the growth of the economy and increased demand from various infrastructure activities such as road construction.

The steel manufacturers' body, the Indian Steel Alliance comprising Steel Authority of India Ltd (SAIL), Tata Iron and Steel Company (Tisco), Essar Steel, Ispat Industries and Jindal Vijaynagar Steel Ltd (JVSL), has provided its inputs to the government.

According to ISA President Moosa Raza, the industry body has proposed the expansion of existing capacities as well as the setting up of new plants.

However, it has pointed out that improved infrastructure like power, roads, railways and water and availability of raw materials like coal and limestone was required to substantially increase steel production in the country.

"Any talk of expanding the industry should also involve the development of infrastructure, which is very important," Raza said. It is estimated the total steel production in the country stands at only 32 million tonnes, against 220 million tonnes produced by China every year.

The per capita consumption of steel, which is a good index of a country's economic development, is also low at 28 kgs, against 200 kgs in China and 400 kgs in developed countries. The Rs 74,000 crore domestic steel industry is currently facing a shortage of coal due to the flooding of mines in Australia.

Raza said a high-level delegation of the Chinese iron and steel association would visit the country again in July to negotiate the supply of coal to India and that of iron ore to China.

As per available data, China imports 10 per cent or about 2.5 million tonnes of its total requirement of iron ore from India. On the other hand, India imports about 3.8 million tonnes of coke from the neighbouring country.