Tata Steel, seeking a greater role the government in promoting Indian industry, has called for an ultra mega steel plant policy, on the lines of the similarly named policy to promote the power sector.
“There is a gas policy; there is a policy for power plants. The steel sector, too, requires a policy like ultra mega steel plants. We need a standard set of policy for iron ore, etc,” H M Nerurkar, the company’s managing director, told journalists in New Delhi today.
The steel plants to be covered under the policy should have a capacity of at least 6-7 million tonnes a year, he said.
Iron ore is the main raw material for steel production, the other being coal.
The government offers ultra mega power plants (UMPP) for rate-based bidding. Companies quoting the lowest bag the project. The projects are allotted to companies with various clearances, including those relating to land and environment. Coal blocks for pithead-based UMPPs are allocated with the projects.
The government, said Nerurkar, should also provide whatever support it can at the diplomatic level.
This would be critical if Indian companies are to counter the rapid march of Chinese ones, backed by the might of their government, in acquiring assets all over the globe.
“India does help many countries in building infrastructure. We should leverage that,” he said.
Asked whether the company had made a representation to the government seeking active support, on the lines of the Chinese government’s backing to its companies, Nerurkar said, “We have pointed out to the government that this is what the Chinese do. We cannot do exactly that. It will be difficult to have the same model of joint economy here.”
There is a bit of this happening in Mozambique, where Indian Railways is helping in the construction of a railway line and Tata Steel is working closely with it. The company has coal interests there.
Other than Mozambique, Tata Steel has a large presence in many parts of the world, thanks to its acquisition of Corus in 2007 and its hunt for raw material to keep its furnace fires burning.
In Ivory Coast, for instance, the company has a huge deposit of iron ore, which should be operational in four to five years, and may yield up to 20 million tonnes a year.
Another in Canada, a smaller deposit in comparison, should be able to cough up 4 million tonnes a year.
Nerurkar believes that ore prices will stay high for at least another three years and steel prices in this period will rule more or less in the current band.
