Why Posco shows so much interest for India?

Pravat Kumar Pattanaik

Bhubaneswar: World's steel market came down to 2003 level. Every country including China also worried about the low price of steel products. Despite this gloomy picture of steel industry in whole world, South Korea's largest steel producer Posco shows so much interest for India is an exception.

In this article I try to convince my reader about the possible thought of Posco management for India specific project.

Here I like to mention  first that, Today in Mumbai, Posco signed a Memorandum of Agreement (MoA) with Uttam Steel and Power Limited. These to company decided to form a joint venture to put up a greenfield integrated steel plant in Maharastra. The capacity of the plant would be 3 MTPA. It will constructed in two phases as mention in the official statement of Uttam Steel.

Ten years ago Posco signed a Memorandum of Understanding (MoU) with Odisha government to set up a 12 MTPA integrated steel plant in Jagatsinghpur district. For various reasons like problem in land acquisition, local land losers strong protest for the project, minimg lease, etc, Posco project did not seen the light here. Though hope for the project steel alive as told by the company official sitting in New Delhi.

Problem in Odisha

Initially Posco plans to put a bigger plant in Odisha as the state government agree to provide Khandadhara mines to the company. But, after new mining policy enacted by central government every mine to be allotted through auction route. Posco got the strong shock for mine. Though its several failed attempt to convince the State and Central government, why Khandadhara mine so much important for this project.

Land acquisition has been biggest problem for Odisha project. Local people divided over this ambitious projcet. But majority of them did not want to give their land for Posco project.

Green approval also another area of concern. Water linkage also a issue.

Why interested for India?

• As everybody aware that steel consumption in India is in very low level, That means, for business there is lots of scope for any company.
• The Narendra Modi government announced Make in India plan to enhance manufacturing of product in India. Government organised many roadshows overseas to attract investment under Make in India. It can be treated as a great opportunity for any foreign company to set up its base in India as government itself decided to help all those company want to come to India.
• Twenty first century is Asia's century. In Asia, China and Japan achieve highest steel production capacity. They export steel to every county of the world. In this two country there is minimum chance for any company to grow rapidly.
• India is the only developing country in Asia where demand is high, large scope for business growth and now a favorable and stable government in centre.
• Indigenous steel producer Tata Steel, Jindal Steel and Power Limited, JSW, Jindal stainless limited (JSL), VISA Steel, Mesco steel have total installed capacity near about 75 MTPA. China installed capacity much higher than India.
• Bilateral ties between India and South Korea so good. Posco can take advantage of it.
• Posco has good understanding of India's business environment as their executives were here from last 10 years.
  

Why Maharastra?

• Posco chooses Maharashtra for it's greenfield project because it has already a 1.8 MTPA cold roll mill. 
• Maharashtra one of the favorable state for investor to do business easily.
• This state has Mumbai like financial city which will helpful for trading product.
• Strategically located. 
• Good road, rail and Air connectivity.
• There are many mines going to be auctioned in Maharashtra from which Posco can bid for one.

JSPL's gas dream in steel making process

Bhubaneswar: Eminent industrialist of the country,  Naveen Jindal led Jindal Steel and Power Limited (JSPL) going to achieve a great milestone in steel making process. Company announced to start sponge iron production using synthesis gas first time in the world. By May 15 of this year company will start production of sponge iron using synthesis gas in the Angul plant. Sponge iron to be produced through direct reduced iron (DRI) route. DRI plant has the capacity to produce 2 million tonnes per annum.

Neveen Jindal in Odisha secretariate buliding

JSPL has a six million tonnes capacity based coal to gasification plant in Angul district of Odisha. Company did substantial investment in this project. Today, after deliberation with chief secretary of Odisha J K Mohapatra JSPL's chairman Naveen Jindal told to media persons that for gasification purpose company will use locally available coal which have more ash component. Highly environmental standard will maintained for this project he added.

Odisha to become the first state in the whole world to produce sponge iron using gas technology. JSPL singed a agreement with South Africa based company Lurgi Technology Company Limited to provide advanced technology for this project.

Government alloted Utkal B-1 coal block to JSPL for this plant. Aproval to start mining activity has still pending with state government.

JSPL's Angul Steel mill

However, JSPL’s ambitious bid to produce petrol from coal got a jolt with the Ministry of Coal de-allocating the Ramchandi promotional block allotted to it. When asked on the fate of the coal-to-liquid project, Jindal said, “The coal block for the project has been de-allocated by the Coal ministry. We will see what can be done on the project.” JSPL’s coal-to-liquid project  (CTL) was to be taken up by its subsidiary Jindal Synfuels Ltd at an estimated cost Rs 60,000 crore.
The company needed approximately 5000 acres of land for the Coal-to-Liquid complex that will include an 1100 Mw captive power plant (CPP) and 50 million tonne per annum coal washery.

Steel Secretary urges paradigm shift in approach to utilise steel slag

New Delhi: A seminar on Promoting Awareness and Usage of Steel Slag was jointly organised by the Ministry of Steel and the Federation of Indian Chambers of Commerce and Industry (FICCI) in New Delhi today.  The seminar was attended by representatives from the Ministry of Steel, Ministry of Rural Development, Ministry of Environment and Forest, Ministry of Railways, Ministry of Road Transport and Highways, Indian Road Congress, National Rural Roads Development Agency, Central Road Research Institute, National Highways Authority of India, Public Works Department, Central and State Pollution Control Boards, Indian Council of Agricultural Research, Bureau of Indian Standards, National Council for Cement and Building Materials as well as by International Slag companies and consultants from USA, Europe and Australia. Experts from various sectors which could benefit through steel slag usage such as cement, construction, infrastructure, railways, agriculture and steel, attended the seminar.

The objective of the seminar was to stimulate discussion among various key stakeholders including the Government, policy makers, industry leaders, steel manufacturers and end-user segments from India, to illustrate existing and possible applications of iron and steel slag, and to highlight its suitability and effectiveness in replacing natural materials.

Steel slag is a co-product generated during the steel making process. It is used as an aggregate in many industries, with a high rate of adoption globally, especially in the United States, the European Union, China and Brazil. Its high abrasion resistance, soundness characteristics, high bearing strength and basicity make it suitable to be used as ballast for railways as well as in road making as a replacement for natural aggregate, in cement making, in agriculture for soil amelioration, in paver blocks & bricks, and also as an alternative to landfills. This necessitates that proper procedures, regulations and guidelines be formulated in India for the testing, processing and usage of slag. The seminar has been a useful platform to bring regulators as well as stakeholders from various industries together to work towards this.

 Stating that the industry needed to now look at time-bound outcomes on the utilization of steel slag,  G. Mohan Kumar, Secretary, Ministry of Steel, Government of India, said, “There should be a paradigm shift in our approach. We need a sustained effort on what is possible and today is a beginning. It is gratifying to see such an overwhelming response to the need to address the utilization of steel slag. The industry needs to come together on this issue, and I hope that the sparkling discussions in the technical sessions result in something concrete.”

Vishnu Shankar Prasad, Secretary General, Indian Roads Congress said, “There is a need to have collaborative research in the country to identify applications of steel slag across sectors. The roads sector in India, being the world’s largest, has the highest capability to absorb industrial co-products such as steel slag, while also addressing costs of road construction. There is a need to have a mission-mode approach to bring all stakeholders to the same platform to discuss optimized ways to utilize this co-product.”

Posco cuts investment plan for 2014, Will it affect the future of Odisha project?

Bhubaneswar: Due to weak demand of steel in major country of the world especially China, world's fifth largest steel company Posco cut it's sales and investment forecast for this calender year. In 2014 Seoul based company cut down it's investment plan outlay by 16 percent to 3.3 trillion won. Company earlier planed to invest 3.7 trillion won on various projects. Won is the exchange currency of Korea.

 Here a obvious question arise about the fate of Posco India's largest integrated steel plant to be build in Odisha's Jagatsinghpur district. This project from beginning always faced many hurdles like land acquisition, getting statutory approvals, local people's anger and many more. State government try hard to transfer required land for first phase construction of the plant. But due to local people's opposition it will not happen smoothly. If Posco will get required land to start construction in 2014 will it able to arrange all money? As the parent company did not specify in which project or region it will cut down it's investment but Asia will not get much investment. In a statutory filling company may have tried to express this kind of speculation.
If required investment not available, then Posco's Odisha project going to delay some more years.
Posco had signed MOU with Odisha government during 2005 to construct plant in 4000 acres land. It promised to invest 52,000 crores for the project. Company cleared a major hurdle for this project with getting environment clearance in January this year. But their has a condition for the company to spend for social commitment. That commitment will raise the project cost by 600 million dollar. Company has to arrange that amount during plant construction.
Posco's integrated steel plant and port project was to originally come up on some 4,000 acres in the coastal town of Jagatsinghpur. However, environmental clearance and land procurement held up the project since 2005. It needs 2,700 acres to commence work on first phase of the project, while the state government has already transferred 1,700 acres to it.
  The steel project had received initial clearance from the Environment Ministry in 2007 and final approval was granted in 2011. The National Green Tribunal (NGT), a quasi-judicial body, however suspended the permit in March 2012 citing environmental concerns.
The environmental clearance for the project comes nearly nine months after a government-appointed panel of experts recommended reinstating an earlier environment clearance given to the steel project.

Posco's environment clearance for the proposed port is still pending.
As per a Posco  if everything goes as planned, the Phase 1 of the project might be commissioned in 2018 while Phase II would be completed three years after completion of Phase I, and Phase III will be commissioned within three years after Phase II. The project will include iron ore mine development over 30 years (total 600 million tonnes) at captive mines located in the Keonjhar and Sundergarh districts of Odisha, as well as development of related infrastructure.
Last year, facing inordinate delays in land acquisition and local opposition, Posco scrapped its proposed Rs 30,000 crore project in Karnataka.
 

India produces 7.25 million tonnes of Steel in March: World Steel Association

Bhubaneswar: India produces 7.25 million tonnes of steel in March. In Asia, India ranked third in terms of steel production behind China and Japan. World steel Association (WSA)  the apex body of global steel industry releases it's report on March production.

In the first three months of 2014, Asia produced 274.0 Mt of crude steel, an increase of 2.6% over the first quarter of 2013. The EU produced 43.8 Mt of crude steel in the first quarter of 2014, up by 6.7% compared to the same quarter of 2013. North America’s crude steel production in the first three months of 2014 was 29.9 Mt, an increase 0.8% compared to the first quarter of 2013. The C.I.S. produced 26.3 Mt of crude steel in the first three months of 2014, a decrease of -2.8% over the same months of 2013.
China’s crude steel production for March 2014 was 70.3 Mt, up by 2.2% compared to March 2013. Elsewhere in Asia, Japan produced 9.7 Mt of crude steel in March 2014, an increase of 2.9% over March 2013. South Korea’s crude steel production was 6.1 Mt in March 2014, up by 8.0% on March 2013.

 

In the EU, Germany produced 4.0 Mt of crude steel in March 2014, an increase of 6.1% compared to March 2013. Italy produced 2.4 Mt of crude steel, up by 8.0% compared to March 2013. France’s crude steel production was 1.4 Mt, an increase of 4.1% on March 2013. Spain produced 1.3 Mt of crude steel, up by 4.1% compared to March 2013.
Turkey’s crude steel production for March 2014 was 2.8 Mt, down by -4.3% on March 2013.
In March 2014, Russia produced 6.0 Mt of crude steel, an increase of 1.3% compared to the same month 2013. Ukraine’s production was 2.7 Mt in March 2014, down by -7.7% on March 2013.
The US produced 7.4 Mt of crude steel in March 2014, up by 0.9% on March 2013.
The crude steel capacity utilisation ratio for the 65 countries in March 2014 was 79.0% and it is 0.4 percentage points lower than March 2013. Compared to February 2014, it is 1.4 percentage points higher.

Update of the Day

1-JSW Steel commissions cold rolling mill in Karnatak.

2-Jindal Stainless gets order for ITER's Cyostat project.

3-Coal companies to take prior action to renew fuel pact in time: Inter Ministerial Group

4-Odisha gives in-principle nod to allot land for Damara Port.

5 -India's March steel production record 7.25 million tonnes

NALCO All Odisha QC Convention inaugurated

Bhubaneswar: 19th All Odisha Quality Circle Convention was
inaugurated today at Nalco Nagar, Bhubaneswar. Ansuman Das, CMD,
NALCO graced the inaugural session as the chief guest and inaugurated

the convention. S.S. Mahapatra, Director (Production), and
S.C. Padhy, Director (HR), were present on the occasion as the guests
of honour.  Besides, Soma Mondal, Director (Commercial) and S.K. Dash, ED(P&T), NALCO, were also present on the occasion. At the
outset, V. Balasubramanyam, ED(Production), NALCO, delivered the
welcome address. This year the theme of the convention is "In the race
for quality, there is no finish line". Altogether, 34 teams comprising
29 Quality Circles and 5 TPMs are participating from 22 organizations
including NALCO, TATA Steel, HAL, NTPC, SAIL etc. The participating
teams would be presenting their case studies in this 2 day long QC
Convention. It may be mentioned that, NALCO is organizing this QC
convention every year, since 1996 with an aim to spread the Quality
Circle movement in Odisha, and also to provide a platform for
competition to encourage the best Quality Circles & TPM Circles
operating in the State.