The Jindal Steel and Power limited (JSPl) is all set to commission its ambitious six million tonne per annum (mtpa) steel plant at Angul by the end of May with commissioning of blast furnace, at the time , when the Union Cabinet chaired by Prime Minister Narendra Modi has approved the National Steel Policy (NSP) 2017.
With clarity of the Union Government through its NSP for availability of raw materials at competitive rates and clarity on mine allocation process through auction, the JSPl with its corporate strategy is expanding its Angul steel plant from the present capacity of 2 MTPA to 6 MTPA. It has also approached the Odisha Government for a rollout of its recent decision to hike the electricity duty from 30 paise to 55 paise.
Availability of raw materials at competitive rates is imperative for the growth of the steel industry. The Government has already come up with Mines and Minerals (Development and Regulation) Amendment Act, 2015 which gives greater emphasis on time bound mine development and increased stress on mineral exploration and sustainable mining operations. The Act has brought clarity on mine allocation process (through auction) and procedure for mining lease renewal and provides for reservation of any particular mine for a particular end use and put conditions permitting auction among such eligible end users. To ensure adequate availability of iron ore and other minerals, the Ministry is making suitable efforts to facilitate auction of mineral blocks in a regular manner. The Union Ministry of Steel in conjunction with Union Ministry of Mines has planned to facilitate creation of a uniform country-wide sales platform for bringing transparency and predictability in the process of sale of iron ore.
However, experts of steel industries along with Executive Director and Head of Mines and Minerals, JSPl Manish Kharbanda, stressed on preferential treatment to steel industry in mining auction. He told that steel industry should get priority and must be integrated with captive iron ore mining for sustainable growth. Auction of iron ore blocks for merchant mining should be done after the steel plants are equipped with captive mines. In auction, most iron and steel plant cannot compete with merchant miners on account of their heavy debt, worsened by low demand and price in the past years.
The State Governments need to conduct faster auction and make sufficient numbers of mineral block available to steel sector based at the respective States to build competitive strength of manufacturing sector. Since more than 75 per cent of the steel plants do not have captive mines and are dependent on merchant miners, the Government should take step to make iron ore available at competitive price. The royalty rate of iron ore is one of the highest in the world and should be reduced. The Government should take steps to ensure iron ore prices to be as competitive as possible for steel companies.
In a memorandum submitted to Union Ministers Mines and Environment and Petroleum and Natural Gas, Rabindra Sahu and B Mishra of Citizen Action Forum here have demanded to stop environmental degradation by the coal based industries in the State.
The Ministry of Steel has already submitted the Intended Nationally Determined Contributions (INDC) for reducing GHG emissions in iron and steel sector which inter-alia projects CO2 emission of 2.2 – 2.4 tonnes per tonne of crude steel in BF-BOF route and 2.6 – 2.7 tonnes per tonne of crude steel in DRI- EAF route by the terminal year of 2030. The steel industry must come forward to achieve the targets.
Under the Paris Treaty (COP 21), India intends to reduce the emission intensity of its GDP by 33-35 per cent by 2030 from 2005 levels. In order to achieve this target, India is in search of energy efficient resources that are affordable and also available. Natural gas is one such greener alternative available. Given the future potential of gas based technology, in terms of up-gradation of coal based DRI capacities in the MSME sector to gas based route, there is a need for captive gas based power plants for the sector and the alternative of injecting natural gas in blast furnace to reduce dependence on imported metallurgical coal (both coking and PCI), ensuring firm supply of natural gas as an imperative to boost the confidence and investment in the gas based steelmaking technology.
In case of gas based steel plants which have been stranded due to lack of supply of natural gas from domestic sources, options are being evaluated in coordination with Ministry of Petroleum and Natural Gas for restoration of domestic gas supply to steel sector, sources said.
Along with JSPl, the high debt burden steel industries of Odisha are trying to expand and exist in the adverse situation of the market. The new steel policy will boost their venture, only if they will do less politics than business. Real CSR work and pro people activities also will help them to grow, added sources.