India’s Ministry of Steel is working to set up scrap-based steel mills across the country through special purpose vehicles (SPVs) involving government steel companies and foreign investors, a senior government official said on Monday, February 13.
The government official said that this is in line with provisions in the draft new National Steel Policy which outlined promotion of more scrap-based steel plants as these are more energy efficient and cost effective in the Indian business environment where energy costs are higher than the global average.
The official said that, while the details of promoting greenfield scrap-based steel plants are still being worked out, the focus will be to create SPVs of government-run steel companies in joint ventures with foreign investors and global steel majors.
The government will be open to offering either minority or majority equity stake to foreign investors in such proposed SPVs as may negotiated between the two entities, the official added.
Meanwhile, in a related development on steel scrap, India’s cabinet of ministers will take a final decision on whether to make the scrapping of old commercial vehicles mandatory or voluntary.
According to the official, the ministry has not taken a final view on whether commercial vehicles older than a fixed number of years will be mandatorily scrapped or whether fiscal incentives will be offered to vehicle owners to replace their ageing fleet. The final decision will be taken by the cabinet before incorporating it in the new steel scrap policy.