India's domestic supply of coking coal should be brought under
the control of the country's steel ministry instead of the coal
ministry, the chairman of Steel Authority of India (SAIL) has
told a major New Delhi conference.
"There's not much attention given to the development of coking
coal mines in the country, so they should be brought under the
steel ministry," CS Verma said at the Confederation of Indian
Industries (CII) Steel Summit in New Delhi on Monday April 30.
Indian steel manufacturers are already sourcing most of their
coal requirements through costly imports, which are compounding
difficulties in sourcing ore and acquiring land for setting up
These problems are mainly responsible for the
lower-than-expected growth rate of 7% reported by the Indian
government for a domestic steel industry that produces 72
million tonnes of steel every year, it was acknowledged at the
Average steel consumption
India's annual per capita consumption of steel has grown from
31kg in 2003 to 56kg in 2011, but it is still less than 30% of
the global average for steel consumption per head of
population, according to World Steel Assn data.
The country's steel minister, Beni Prasad Verma, remained
confident about the future performance of the industry,
"We hope that, by 2020, India's steel production will reach 200
million tpy," Verma told conference delegates, while also
accepting that Indian steel producers are lacking in
To achieve this increase in output, Verma said that his
ministry has prepared a "research and development roadmap" to
incentivise investments in new technologies for steel
production, and has emphasised the use of low-grade iron ore
and non-coking coal by Indian companies.
Almost all the low-grade iron ore fines mined in India are
currently exported, mainly to China.
Naveen Jindal, chairman and md of Jindal Steel & Power,
gave an example of technological advancement in privately run
companies when he said that his company will implement a coal
gasification project at its planned steel plant in Angul in
Orissa, in eastern India.
The company has been working on the project for the past five
years, he said.
There was a general consensus among all speakers at the
conference that profitability has gone from steel manufacturing
in India to the mining industry, and backward integration was
discussed as a solution.
In this regard, the "excessive export duties" on iron ore from
Indonesia, Australia and some African counties were discussed
with some concern.
According to a study presented at the conference by Abhishek
Poddar, principal at management consultancy firm AT Kearney,
61% of upcoming steel manufacturing projects globally have gone
over budget, while 40% are running late.
"The situation in India is even worse, as most companies give
relatively less importance to basic project management issues
and mainly focus on securing government licences and land for
the project," Poddar said.
This practice, he said, leads to fixing of very ambitious
targets. In addition, when actual construction starts, building
and organisational problems cause long delays.
A shortage of skilled manpower and transport facilities in
India were also highlighted as major problems, while there were
suggestions that encouraging mega-steel plants in coastal
locations could help expand the sector, given their easy access
to water supplies and to maritime transport of raw material and