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The steel ministry though has turned down any possibility of direct control of the two key ingredients. All decisions relating to coking coal and iron ore fall under the purview of the Mines ministry. The ministries of steel and mines are often seen at loggerheads with each ministry making efforts to protect the industries under its control.
"We are advocating a thought process that the entire sector life-cycle decision making should have open deliberations with all stakeholders before we form any policy. It's not direct control that may be mandatory but that any intervention we do on iron ore or other raw material it's important that we get the steel ministry on board”, Aruna Sharma, Union steel secretary said here on the sidelines of Asia Steel 2018, a conference jointly hosted by Tata Steel and Indian Institute of Metals.
"If I give you the example of iron ore, as scraps will increase, the requirement of iron ore will plateau down, so it's important that to get steel's input in plans to auction iron ore or when we are working on an export policy on iron ore. Similarly, for other input like coking coal, on how it's extracted, the need is to reduce its ash content and replace imports”, she added.
Sharma said, the issue is under deliberation but stressed on creating a platform where input of the steel ministry is being taken so that policy formulations are holistic and the voice of all stakeholders are taken as inputs.
The steel secretary agreed that iron ore prices have appreciated but it was due to some mines turning inoperative. “Some iron ore mines in Odisha have shut because the miners did not pay the compensation on time. But in case all the mines are opened up automatically, it will ensure that iron ore prices don't go haywire”.
The input cost in steel making in India is high compared to other steelmaking nations. Sharma emphasized on exploring alternative mechanisms for transporting iron ore and finished steel products.
"RINL has used the Sagarmala recently and others are following. We have to reduce our dependency on Railways by increasing use of slurry pipelines, using the Sagarmala so that our dependencies on Railways is only to the extent of the hinterlands”, she said.
She expressed confidence that the steel sector would be the first to be resolved under NCLT (National Company Law Tribunal).
"If you look at the stressed steel assets, the plants are not the problem, they have excellent EBITDA (earnings before interest, taxes, depreciation and amortization) of 22-23 per cent, the problem is of their balance sheet. As the steel ministry, we wish it to be resolved as early as possible so the focus can move to expansion and productivity”, she added.
On domestic steel production, Sharma said, the outlook is positive with the country producing 100 million tonnes in calendar 2017. In the current fiscal, steel production is expected to cross 100 million tonnes. The country's steel production is envisaged at 300 million tonnes by 2030 and 25 per cent of this output is expected to come from Odisha.
Speaking on the occasion, Anand Sen, president (total quality management & steel business) at Tata Steel said, “We need to promote the efficient usage of steel. Energy savings remains a big challenge.”