Govt identifies steel firms for stake sale, says minister

Govt identifies steel firms for stake sale, says minister

New Delhi: The government has identified two state-run steel firms for stake sale, Union steel minister Virbhadra Singh said on Friday.

The minister said the government may raise Rs15,000 crore ($3.2 billion) by selling up to 20% stake in state-run firms.

Singh further said the government was in the process of choosing companies for divestment.

India, the world’s third largest iron ore supplier, is “seriously considering" putting curbs on exports, the minister said, without giving any further details on possible proposals.

“Our first priority should be that all iron ore within the country should be utilized for making steel in the country," Singh told reporters in a question-answer session during an industry event. He did not give any further details or a suggest any timeline for trade limitations.

Spot iron ore prices in China, which buys about a fifth of its iron ore from India, have nearly doubled since April, rising to $110 a tonne on a delivered basis as benchmark price negotiations drag months past their deadline and Beijing’s stimulus plan stokes demand and aids mills’ profits.

But the surge in global prices has put increasing pressure on Indian steel mills, and New Delhi has in the past used duties as a way to attempt to stem the rise in domestic prices by keeping more supplies at home -- measures that would threaten to increase global prices.

Currently, export duty on iron ore lumps is 5% and on iron ore fines it is nil, but miners have been bracing for a possible increase in duties for several months.

“They want to reduce the prices.. they might bring in some duty," said the executive in the Karnataka mine. “The international iron ore market has been hotting up, so naturally it will be disadvantageous for steel companies."