Last Updated : 10 November 2009 at 03:00 IST

India’s steel demand to double in six years

SHARE THIS STORY

NEW DELHI (Commodity Online): Union steel minister Virbhadra Singh said unless the country creates a capacity of nearly 124 million tonne of steel in the next 3-4 years, it may be difficult for it to meet the demand in the country.

In an interview to Economic Times, India’s leading business daily, the minister said the steel ministry has set up an ambitious target of achieving 124 million tonne steel production by 2012.

The global crisis has failed to dampen the spirit of economic growth in India. Particularly, the steel sector in India had started showing signs of recovery somewhere in January, when positive growth in steel demand in the country was visible. During the first six months of 2009-10, steel consumption has shown 7% growth, he told the newspaper.

Steel demand continues to be strong and is likely to double within the next 5-6 years. Unless India builds capacity of nearly 124 million tonne by the next 3-4 year, it may be difficult for the country to meet the domestic demand for steel, he added.

A few greenfield projects have already made substantial progress in critical areas such as land acquisition and allocation of mineral resources. One of the major reasons impeding the early establishment of greenfield steel projects is the land acquisition, combined with rehabilitation and resettlement.

Adequate compensation for land and effective rehabilitation are two solutions to overcome this obstacle. The major steel investors must find ways to include the project-affected people as stakeholders in their projects concerned.

Foreign investment remains sluggish mainly due to problems faced by proposed projects of Posco, ArcelorMittal. Taking the current status of progress, the minister thinks that Posco project in Orissa would be able to take off soon.

ArcelorMittal has been allocated mineral resources. The land acquisition of the company in Orissa and Jharkhand has also made some progress. An Inter Ministerial Group has been constituted and is already functioning under the chairmanship of secretary (steel) to monitor the progress of the projects.

The market prices of steel are stable and there is no need to take any kind of restrictive action. However, the government is continuously monitoring the international price movement vis-a-vis the situation in the domestic market. As and when necessary, the government will initiate appropriate actions, the steel mister said.