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India needs investment of $210 billion over the next decade to achieve the steel production capacity of 300 million tonnes per annum by 2025 from the current 90 MT, according to C.S Varma, chairman and managing director of Steel Authority of India.
Also, a dedicated funding agency on the lines of Power Finance Corporation is needed for the steel industry to ensure the funds-flow for the capacity expansion, he said, on the sidelines of a programme here yesterday.
He said that huge infrastructure expansion in terms of ports and roads is also needed to achieve the goal.
“I am seeing it as a challenging target. But achievable.
“One million tonne (MT) of steel needs $1 billion investment. Today we have capacity of 90 MT. That means 210 MT will be additional capacity. That means $210 billion investments. It is massive investment,” Varma said.
Referring to government’s decision to spend $1 trillion on infrastructure creation during the 12th Plan period (2012-17), Varma said the target is achievable with the kind of investments that are expected to flow.
“We have to have dedicated financial institution for funding steel sector. There is Power Finance Corporation to fund the requirement of power sector....We have suggested to the government. The government is looking into the matter.”
Ten years ago China had 190 million tons per annum capacity and it has risen to 750 million tons now, he said.
About the availability of coal – essential for steel making – Varma said the country needs to enhance the coal washery capabilities as currently most of the coking coal produced domestically is diverted to power projects due to lack of washeries that are needed to remove the ash content.
“We have 33 billion tons of coking coal reserves in India. It is trillions of dollars of mineral beneath the earth. We need to have advanced technology to bring it out.”
International Coal Ventures Ltd, a joint venture of SAIL, CIL, RINL, NMDC and NTPC for acquiring foreign coking coal reserves, has identified four-five assets, Varma said.
This is an opportune time to go for the buyouts, with valuations down by half as the international coal prices have come down to less than $150 a tonne from a peak of $300 a tonne a couple of years ago, he added.
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