PSUs iron ore interest being undermined in Ghatkuri

By Sanjeev Shekhar
The present global financial crisis has severely dented the economies of many developed countries. India on the other hand, due to superior governance and stupendous growth shown by some key business sectors, have managed to reduce the impact of this crisis on its economy and is highly expected to achieve a decreased yet significant GDP of 7-7.5% by the close of this financial year.

The Indian steel industry though impacted with steep fall in demand has greatly contributed towards the sustainability of the economic growth uptil now. The Ministry of Steel aims to achieve a steel production of 110 Million Tonnes by 2010-11 and 200 Million Tonnes by 2020. The three eastern states of India, especially Jharkhand, has the one of the richest iron ore resources in the country and is expected to the play a significant role in helping the country in achieving the steel targets for the 11th and subsequent 5 year plans.

India will only be able to match the world’s largest producers of steel like China and Japan, provided various State Governments allocate on a priority basis the precious iron ore resources to large scale projects promoted by the most eligible and credible steel producers, instead of small capacity projects which in most cases neither contribute to the infrastructural development of the region nor scientific development and optimum utilization of the mines, nor are able to adhere to the stringent environmental norms – purely because their project size is unable to absorb such huge costs. They can also not match our growth requirements.

A total of 74 MOUs have been signed in Jharkhand for Mega Investment in setting up Steel, Power, Cement & Sponge Iron plants at a proposed investment of Rs. 2,93,802 crores. Of the total 75% of the companies which had signed the MoUs are yet to acquire land and a same percentage are yet to file Detailed Project Reports to the concerned authorities. As far as ground level implementation is concerned only 18% companies have started the first phase of their production and that these are mostly sponge iron plants. It is not suprising that in the last five years (since the signing of the MoUs) only approximately 5,700 direct employment opportunities have been created by these private players till date, as compared to the committed 200,000 jobs. Such a scenario has resulted in poor financial condition of the farmers who gave their land willingly in the hope of better future and living conditions.

Inspite of such a poor track record the present Jharkhand Government has not learnt any lessons and continues to jeopardize the development potential of the state and it’s resources. The government continues to favor adhoc and non-planned allocation of precious mine resources to projects which will not significantly contribute to the development of the state’s mineral based industry. The change in Chief Ministership does not seem to have brought any change in this perspective.

In light of the current recessionary trends many key entrepreneurs have also deferred investment in new steel plants despite having acquired iron ore blocks. It is noteworthy to mention that apart from couple of major players like SAIL and Tata Steel, most of the smaller steel/mining companies are producing sponge iron, which does not justify allotment of mining leases to them.

The recent case of the Chief Minister giving it’s go ahead to allocate the lucrative Ghatkuri mines which was reserved for the Public Sector Units to private sector companies which are proposing to set up small capacities is another example of State’s adhoc and totally adverse policy for the development of the iron ore potential of the state. Inspite of the fact, that Ghatkuri RF is reserved for allotment to PSUs only for the purposes of superior mineral development, State Government had not bothered to check this fact and instead recommended allotment to few private steel players.

The CM’s nod for allotment of Ghatkuri iron ore mines to private players, is clearly going to undermine the PSU’s iron ore interest such as that of SAIL which has committed to set up 15 million tonnes Greenfield steel plan in Jharkhand with the total investment of Rs 60,000 Crores and was also an applicant for allotment of the iron ore mine in Ghatkuri. Inspite of the creditibilty and commitment of SAIL as a PSU towards the socio-economic development of the region the CM has for reasons best known to him has chosen to undermine the development potential of the Ghatkuri region and interest of the people at large.

Ghatukuri RF has a total mineable area of 3,000 hectares, out of which the 6 private steel companies who have approached the Supreme Court, require mining leases on an area of 2700 hectares. Most of the companies are planning to set up capacities in the range of 1 million tons. Given the past track record will not be surprising that these applicants are not serious in their endeavor and are using the opportunity to block the scares commodity. Allocation of mines to small projects will also lead to unscientific mining.

It is hoped that the Government will all the precious resource to those who will undertake suitable development of the mine and are committed to setting up large steel plants in a time bound manner.

Sanjeev Shekhar

Journalist/Media Consultant

Procedural delays hamper timely implementation of mega projects

By Sanjeev Shekhar
Ranchi-

Despite the centre’s prior approval to grant mining lease (ML) or prospecting lease (PL) to nearly two dozen companies, the ground level mining activities could not kick off in the state. Thanks to the procedural delays of the various concerned departments owing to which the companies here remains a confounded lot.

Statistics available with the department of mines shows that as many as 18 companies have been granted ML while four companies have got PL. However, the companies having the centre’s nod are unable to carry out the mining work at the respective sites in the absence of statutory clearances required from the Indian Bureau of Mines (IBM), environment and forest, state pollution board clearance so on and so forth. Once armed with these clearances, the companies would be entitled for the lease to carry out their assigned tasks at the sites.

Interestingly, there are scores of companies that have been granted centre’s prior approval for more that two to four years back but the statutory clearances are proving the spoilsport at the ground level. “We are unable to begin work as clearances from the department concerned are awaited,” was the common refrain of the industrial representatives here.

The main functionary of the Electrosteel Company, Nirmal Kataraka, pointed out that the centre’s approval does not entitle them to begin work at the site instantly. The company has been granted centre’s approval for Kodlibad mines area in West Singhbhum for 192.30 hectares. The approval came on January 25, 2006. The state has asked the company to get the clearances from the related departments following which lease would be eventually granted for carrying out the mining work.

“It takes time to seek clearances from departments particularly environment, forest and pollution. Lots of departments are involved and all have their procedures that cannot be overlooked. Thus it takes time to begin work at the site,” Nirmal said.

Endorsing the viewpoint, the officials of the Sunflag firmly held that such clearances are taking nearly 3 to 5 years time. Consequently, the work at the ground level related to mining cannot be kicked off. “In some cases, the forest clearances are awaited for decades together, said the Sunflag official, Jagannathan Somu. Sunflag has been allotted 120 hectares at Kodlibad mines in the West Singhbum in 2006.

The official spokesperson of the Anandita Traders informed that the company has been allotted iron ore last year at Param-Baljori covering an area of 47.15 hectares. He said that normally the statutory clearances takes time of 20-24 months. “We have to give the mine plan, seek clearances from the various ministries at the centre as well as at the state level. Such process needs time,” the official said explaining that such things are normal in the day-to-day functioning.

Sanjeev Shekhar,

Media Consultant/Journalist/PR

Reduce costs-improve quality, steel industry told

By Sanjeev Shekhar

The rate of technology innovation in steel industry has been high, as steel makers are motivated to reduce costs and improve quality. While steel producers continue to undertake research in areas of product development and operational improvements, equipment suppliers have been driving force behind radical process advances, stated the Director (Technical), Steel Authority of India, V.K.Gulhati during his visit to Ranchi recently.

Gulhati was speaking as the chief guest on international technical meet of “Sino-Indian Steel Plant Equipment Manufacturers and Suppliers (SIEMS-2008)” at Ispat Bhawan, SAIL. Organised under the aegis of the Indian Institute of Metals, Ranchi Chapter, in association with Centre for Engineering & Technology (CET), SAIL, R&D Centre for Iron & Steel (RDCIS), SAIL and MECON Ltd, the meet was inaugurated to hold interaction between Indian and Chinese equipment manufacturers, suppliers and users at one forum for better understanding of each other's requirement.

In the keynote address the ex-managing director, Durgapur Steel Pant, Dr. S. K. Bhattacharya, expressed his concern and said the steel companies today does not have enough equipment manufacturers, suppliers and engineering, procurement and construction (EPC) contractors who can meet the strict deadlines that have been set. Inadequate availability of EPC contractors has been a major constraint over the last few years in this sector, stated Bhattacharya.

He asserted that there has been no major capacity addition in the equipment manufacturing sector in recent years as the steel industry went through a period of hibernation. In Europe and USA capacity addition in steel making mostly took place in sixties and seventies.

“The technology, particularly the design and development capability need to be developed among most of the Indian equipment manufacturers. They have to bridge the gap between drawing and design. Till this is achieved the dependency in the foreign company would continue and would be a major bottleneck for prosperity of the Indian steel industry,” said Bhattacharya.

He suggested that organizations like Centre for Engineering and Technology and Research and Development Centre for Iron and Steel (RDCIS) can extend meaningful support to Indian equipment manufacturers. The Chinese experience in this regard would be quite educative, as China has built a successful infrastructure and support services for equipment design. This meet will help in bring about the possible collaboration for mutual benefit that needs exploration.

“The concept of this meet is very relevant in the present scenario. The epicenter for growth would be Asia. There is lot of optimism amongst Indian steel makers having ambitious plans. Steel majors from across the world has been attracted to India to set up steel plants for the favourable investment climate and anticipated demand,” concluded Bhattacharya.

Sanjeev Shekhar,

Journalist/Media Consultant/PR