About two weeks ago, India’s highest court had partially lifted the ban on mining of iron ore in the country’s southern State of Karnataka. (Read MetalMiner’s take on the story here.) Experts and steel manufacturers hailed the decision as a “welcome relief,” since India’s steel industry had been suffering for almost two years due to this ban, having to rely largely on ore imports to get by.
But a couple of days ago, one of India’s largest private steel companies, JSW Steel, announced it had decided to put on hold a plan to set up a 10 million-ton steel plant worth about US $6.4 billion (Rs 35 trillion) in the eastern state of West Bengal, as it had not been able to secure long-term iron ore supplies.
The irony was not lost on those following this sector.
JSW Chairman and Managing Director Sajjan Jindal made the announcement. He was unequivocal while emphasizing that until the iron ore issue was not resolved, there would be no forward movement.
An embarrassed West Bengal government, which, sensing a loss of a business opportunity, tried to salvage the situation by saying the plant was “not on hold.” A report by TV channel NDTV Profit quoted State Industry Minister Partha Chatterjee insisting the project was not stalled.
The Minister stressed that his government and the JSW management were working together to press the Government of India for a national iron ore policy that would allow a uniform supply of the ore to all the states.
This, interpreted by many in the industry, meant the project was effectively on hold. There has been pressure put on the government by steel manufacturers for some time now to spell out a national policy on iron ore, but for any such policy to come into effect, it will take years.
The West Bengal minister was obviously trying to save face…Continued in Part Two.
Sohrab Darabshaw contributes an Indian perspective to MetalMiner.