INVC NEWS
New Delhi,
The Minister of Mines & Steel Shri Narendra Singh Tomar chaired the meetings of the Consultative Committee for the Ministries of Steel and Mines on ‘Challenges in Steel Sector’ and ‘Reforms in Mining sector’ in New Delhi today.
Speaking on the ‘Challenges in the Steel Sector’ Shri Narendra Singh Tomar said that India’s is on its way to be the world’s third largest crude steel producing country surpassing USA, as per trend in the current calendar year (CY 2015). However, the per capita steel consumption in India is still very low, about 60 kg compared to the global average of about 217 kg per capita.
With anticipated growth in the economy, government initiatives like Make in India and likely increased investment in infrastructure, the future growth of Indian Steel sector is expected to be positive and the government has set upon itself an ambitious target of nearly trebling our steel-making capacity to 300 million tonnes in the next decade, i.e. by 2025.
Shri Tomar said, ‘we are also aware that presently the steel sector faces many challenges. Imports increased by 75.5% in FY 2014-15. In the current year 2015 also, during April to September 2015, imports have increased by about 42% compared to corresponding period last year. The domestic steel prices have maintained a sharp downward trend during the period.’
The rising debt of the steel industry is also a major concern. The share of stressed advances to the steel sector has been the highest among various sectors excluding infrastructure.
Steel companies face difficult financial situation and the net sales realization of steel companies is decreasing due to declining prices of steel products, leading to financial strain due to reduced operating EBIDTA and profits.
With a lot of capacity added in the last decade or so, especially in China, and steel demand either falling or remaining stagnant in most countries, the industry is burdened with massive excess capacity, estimated to be around 550 million tonnes (~25% of global capacity). The biggest overcapacity exists in China, 250 to 300 million tonnes. The Chinese steel industry continues to produce and sell steel at extremely low prices, sometimes even below cost of production.
Since in the medium term India is the only major nation which will be seeing significant growth in steel consumption, the attention of countries like China, Japan and South Korea is sharply focused on the Indian market.
The Minister said that appropriate steps will be taken by the Government on continuous basis to ensure that the stress in the steel sector in the country is appropriately addressed. We are in continuous touch with the stakeholders to understand various related issues and are trying to ameliorate their problems, within the framework of a deregulated steel sector.
On ‘Reforms in Mining Sector’ Shri Tomar said, since the beginning of 2015 lots of reforms have been initiated in the mining sector, beginning with the Mines and Minerals (Development and Regulation) Amendment Act 2015 (#MMDR Act 2015). The Ministry of Mines have framed various Rues under the Act like the Minerals (Evidence of Mineral Contents) Rules 2015, the Mineral (Auction) Rules 2015, the NMET Rules, the Mines and Minerals ( contribution to District Mineral Foundation) Rules and have been conveyed to the States to administer auctioning of mines in a transparent manner. For accelerating exploration, over 8.13 lakh square kilometres of Obvious Geological Potential (OGP) area will be taken up for aero-geophysical survey.
The Minister for Mines & Steel Shri Narendra Singh Tomar while chairing the meeting of the Consultative Committee of the Ministry of Mines emphasised on the need for working in close coordination with states, and also bringing the beneficiaries from exploration and exploration agencies, on same platform for better synergy and progress. The Minister underscored the significance of professional and business-like functioning for a time-bound and result-oriented approach. Exploration of minerals on an urgent basis is need of the hour, and NMET is taking a concrete shape to give direction and energy to exploration.
Various issues that came up for discussion in the meeting included Environment and Forest clearances for mining and exploration, use of space technology, pooling of resources and capabilities, DMF fund utilization for PMKKKY, role of central and state agencies and PSUs, exploration status with respect to mine auction planning, bringing in experts and private agencies for value-addition, matters pertaining to North-east states, control of illegal mining, exploration rate schedule for all minerals and e-governance etc.
Members of Parliament who participated in the meeting included Shri Tapan Kumar Sen from Rajya Sabha, Shri Laxman Giluwa, Shri Shyama Charan Gupta, Shri Bidyut Baran Mahato, Shri Bodh Singh Bhagat, Shri Janardan Singh Sigriwal, Dr. Anupam Hazra, and Sardar Sher Singh Ghubaya from Lok Sabha.
Secretary Mines, Shri Balvender Kumar, Secretary Steel, Smt. Aruna Sundrarajan, SAIL Chairman (i/c) Dr. Anup K Pujari and senior officials from the Union Ministries of Steel and Mines, GSI, MECL and Steel PSUs attended the meeting.
