Ministerial group to discuss steel sector land, ore woes on 8 Oct

Ministerial group to discuss steel sector land, ore woes on 8 Oct

New Delhi: A group representing several ministries to monitor infrastructure and administrative bottlenecks in the steel sector is expected to meet on 8 ­October.

Senior bureaucrats will discuss issues ranging from securing raw material such as iron ore and coal, delay in environment clearances, and poor rail and road connections for the first time since Prime Minister Manmohan Singh met Orissa chief minister Naveen Patnaik earlier this year to discuss the sluggish progress of South Korean steel maker Pohang Iron and Steel Co. Ltd’s (Posco) investment plans in the state.

Ministries that will be represented include steel, coal and mines, shipping, road transport and highways, and environment and forests.

The Posco project, which is the largest foreign direct investment at $12 billion (Rs47,760 crore), was scheduled to start in July last year. Construction at its plant site is slated to start in October after months of battling local protests over land, but there are few signs of securing an iron ore mine before the end of the year. Allocation of the mine was part of the original deal.

While the Prime Minister’s Office has regularly held meetings to discuss issues relating to steel investments, there remains a big question mark on how the many proposals will take off on time.

According to the steel ministry’s revised numbers, India’s total production is 56.84 million tonnes (mt), but will double to 124.6mt by 2011-12.

The additional 67mt capacity will see an investment of Rs2.8 trillion, taking together land, infrastructure and equipment costs of projects expected to come up in the iron ore-rich states of Orissa, Jharkhand, Chhattisgarh and Karnataka.

Last month, the ministry called two meetings and invited more than a dozen steel firms that have plans of building plants with a capacity of more than 3mt. They included Tata Steel Ltd, Essar Steel Ltd, JSW Steel Ltd, Posco-India Pvt. Ltd, Ispat Industries Ltd, and Mittal Steel Ltd, a subsidiary of ArcelorMittal. A separate meeting was held with public sector firms Steel Authority of India Ltd (SAIL) and Rashtriya Ispat Nigam Ltd.

Many of the key issues concern accessing land and ore. The Jharkhand government, which has signed over three dozen memoranda of understanding with private investors, is yet to announce a resettlement and rehabilitation policy, without which land acquisition is not ­possible.

Ispat Industries, for instance, said it needs 2,500 acres for its Jharkhand plant and 200mt of iron ore reserves. Monnet Ispat & Energy Ltd, on the other hand, paid up for 800 acres in Orissa in May 2005, but still awaits ­clearance.

An official of the steel ministry’s economic research unit, who did not want to be named, said while the 2011 target will be met with the expansion of Tata Steel, SAIL and Bhushan Steel starting on schedule, newer plants that need to tie up loose ends will face delays.