India's Ministry of Steel has issued a year-end review of 2007, outlining the current state of the steel sector in India and disclosing new investments on the agenda.
According to the review, India's steel sector has been witnessing extraordinary growth due to strong domestic demand, which has helped make the country the fifth largest crude steel producer in the world, as opposed to the eighth largest three years ago.
The production of finished carbon steel products has increased from 35.41 million mt in 2002-2003 to 49.58 million mt in 2006-2007. During the first seven months of the current fiscal year (from April to October 2007), the production of finished carbon steel was around 29.37 million mt and is expected to be 55.5 million mt in fiscal year 2008.
The Ministry of Steel also stated that demand for steel is expected to remain buoyant, whereas the country's steel production capacity is expected to reach 124 million mt by 2012. The brownfield expansion plans over the next five years are expected to add a capacity of 40.5 million mt to the existing capacity of 56.84 million mt. Meanwhile, capacity expansion through greenfield projects is expected to reach 28.72 million mt, thus taking total output capacity to 124.06 million mt. In addition, taking into consideration the plans expressed by a number of steel investors including multinational companies, domestic steel majors and foreign direct investments, the capacity likely to be achieved by 2019-2020 will be around 275 million mt.
According to the current ambitious expansion plans, the capacity of Steel Authority of India Limited (SAIL) will be increased from 14.6 million mt of hot metal to 26 million mt by 2010. Meanwhile, by 2020 SAIL also plans to further expand its capacity to 60 million mt per annum. With regard to Rashtriya Ispat Nigam Limited (RINL), the expansion will increase the mill's capacity from the current level of three million mt of hot metal to 6.3 million mt by 2009-2010. RINL also plans to enhance its capacity to 16 million mt per annum by 2020.
India's Ministry of Steel has also indicated the securing of raw materials as a major concern, given the major expansion and investment plans. To this end, by 2020, about 70 million mt of coking coal will be required of which 85 percent will have to be imported. SAIL, RINL, Coal India Limited, NTPC and National Mineral Development Corporation signed a MoU in August this year to jointly promote a Special Purpose Vehicle for the acquisition of coal mines and properties abroad. The government cabinet approved the Ministry of Steel's proposal in this regard in November 2007.