Mittal deal has Indian steel producers worried

Producers meet steel minister to safeguard their iron ore supplies.

A day after LN Mittal said he was close to finalising his proposed plant in Jharkhand, three Indian producers met Steel Minister Ram Vilas Paswan in a bid to safeguard their iron ore supplies.

Sajjan Jindal of Jindal Vijaynagar, Pramod Mittal of Ispat India, who happens to be LN Mittal's brother, and Prashant Ruia of the Essar group, told the minister on Sunday that the ore requirements of existing steel producers should be met before allocating captive mines to new entrants, or exporting the ore.

Industry sources said the three impressed upon the minister that the location of a producer's plant should not be a factor in allotting captive mines. Existing producers may have plants in any part of the country but that should not come in the way of they getting captive mines irrespective of where they are available.

The meeting is significant in view of the upcoming mining policy, which was also a subject of discussion at LN Mittal's meeting with Paswan last week.

Interestingly, all three"" Jindal, Mittal and Ruia""are part of the Indian Steel Alliance (ISA), but met Paswan in their individual capacities.

However, what they said was in line with ISA's demands. "We have demanded that all existing plants that do not have captive mines should be given captive mines first," said Moosa Raza, president, ISA.

Sunday's meeting marked another turn in the fast-intensifying battle for India's iron ore deposits.

According to ISA, while allocating a mine, the first priority should be given to existing steel plants with capacities of 2 million tonnes or more.

Second, to those existing plants that do not have adequate mines and are going in for brownfield expansions. New plants should get only the third priority.

"ISA is totally opposed to the concept that someone investing in a state should get captive mines in preference over others that have plants elsewhere. Esssar, Ispat and Jindal, all have invested in the western and southern regions. The policy was not there then. What crime have they committed?" said Raza.