Captive Iron Ore Mines for Rashtriya Ispat Nigam Limited (RINL)

Captive Iron Ore Mines for Rashtriya Ispat Nigam Limited (RINL)

During the last three financial years RINL has been profit making as indicated below:-

(Rs. in Crore)

	2012-13	2013-14	2014-15
Profit After Tax (PAT)	353	367	62

The profits for the year 2014-15 were lower than those of the previous year due to various factors including impact of cyclone Hudhud, market conditions, cheaper imports, etc.

Necessary steps were taken by RINL for restoration post hudhud and all the units have been brought back into operation in a phased manner, progress of which was closely monitored by the Ministry of Steel. The Company has also filed claims for damages to property etc. and loss of profits with the Insurance Company.

Steel is a deregulated sector, the role of the Government is that of a facilitator. The Government has taken steps to support domestic steel players (who also include RINL) which inter alia include the following:

· MMDR Amendment Act 2015 and Coal Mines (Special Provision) Amendment Act 2015 for facilitating raw material availability;

· Peak Customs duty rate enhanced to 15% from 10%;

· Effective Customs Duties enhanced twice @2.5% each on 16.06.15 &12.08.15. Import Duty is now 12.5% on some products;

· Govt. has amended the Steel & Steel Products (Quality Control) Order, 2012, in December, 2014, in order to ensure that only quality steel is imported into India etc.

As per the Mines and Minerals (Development and Regulation) Act, 1957, as amended by the Mines and Minerals (Development and Regulation) Amendment Act, 2015, the State Governments have been empowered to grant mining leases through the method of auction under section 10A or through the reservation route under section 17A (2A) of the Act. Therefore, allocation of new mining lease is to be regulated as per the provisions laid down in the amendment Act.

There is no proposal to merge RINL with National Mineral Development Corporation.

This information was given by Minister of State Sh. Vishnu Deo Sai in reply to a question in Lok Sabha today.

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Steel Research and Technology Mission of India

Ministry of Steel is facilitating an Industry driven institutional mechanism namely Steel Research & Technology Mission of India (SRTMI), to facilitate joint collaborative research projects in the iron & steel sector in India. The salient features of SRTMI are as under:-

· SRTMI is an industry driven initiative which has been setup as a Registered Society wherein Ministry of Steel is a facilitator.

· SRTMI will be governed and administered by a Governing Body comprising the steel CEOs, Domain Experts and a representative of Ministry of Steel.

· The executive functioning of SRTMI will be carried out by the Director, SRTMI, who will be assisted by a suitable/appropriate supporting structure.

· The participating companies shall pay an initial entry fee @ Rs. 25/tonne of crude steel produced during 2013-14, or, Rs. 5 Cr., whichever is higher, to facilitate the creation of SRTMI.

· Initial corpus for setting up of SRTMI is Rs. 200 crore of which 50% is to be provided by Ministry of Steel and the balance by the participating steel companies.

The R&D investment of the leading steel companies in India in terms of percentage of their turnover ranges from 0.05 to 0.5% vis-à-vis 1-1.5% in leading steel companies internationally. Some of the steel companies have also formulated their R&D masterplans to increase their R&D expenditure to 1% of their turnover. The objective of SRTMI is to promote R&D investment in the Indian steel sector.

This information was given by Minister of State Sh. Vishnu Deo Sai in reply to a question in Lok Sabha today.

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Modernisation of Steel Plants

In a statement laid on the table of the Lok Sabha today the minister of Steel and Mines Shri Narendra Singh Tomar said that there are two steel producing Public Sector Undertakings under the administrative control of the Ministry of Steel namely, Steel Authority of India Limited (SAIL) and Rashtriya Ispat Nigam Limited (RINL). SAIL has five integrated steel plants namely, Bhilai Steel Plant in Chhattisgarh, Rourkela Steel Plant in Odhisa, IISCO Steel Plant in West Bengal, Durgapur Steel Plant in West Bengal, Bokaro Steel Plant in Jharkhand and three special steel plants namely, Alloy Steel Plant in West Bengal, Salem Steel Plant in Tamil Nadu, Visvesvaraya Iron and Steel Plant in Karnataka. RINL has one integrated steel plant namely, Vizag Steel Plant in Andhra Pradesh. During the financial year 2014-15, the capacity utilization of SAIL was 79% and that of RINL was 113%.

Steel is a deregulated sector and the role of Government is limited to that of a facilitator. The decisions to modernise and expand steel plants are essentially taken by the respective companies, based on commercial considerations. SAIL and RINL have undertaken modernization and expansion programme funded by their own sources. Modernization and expansion of Rourkela, IISCO, Durgapur, Bokaro & Salem Steel Plants of SAIL and Vizag steel plant of RINL have been completed. Modernization and expansion of Bhilai Steel Plant is likely to be completed by March, 2016.

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Steel Prices and Quality Control of Steel

The details of rates of wire rod during the last three years are given below:-

(Figures in Rs. per Tonne)

Month	2012-13	2013-14	2014-15	2015-16
April	50230	46500	48353	38260
May	50640	46500	48208	39999
June	49630	46250	48353	35741
July	49580	46250	48932	32993
August	49880	46000	43600	32304
September	49220	46710	43202	32517
October	48870	46600	42904	31139
November	48510	46760	39757
December	48660	47210	38251
January	47360	47470	39527
February	46960	47820	39248
March	46450	47520	39133
Prices on the basis of Mumbai Retail Price Source: JPC

The Ministry of Steel has notified, vide its orders dated 12^th March, 2012, the Steel and Steel Products (Quality Control) Order 2012, whereby, all manufacturers, international and domestic, have been prohibited from manufacture, import, store for sale or distribution of steel and steel Products as specified in the schedule, which either do not conform to the standards or do not bear the standard mark (BIS or ISI Mark).

Steel prices are market driven and are based on specific demand and supply conditions in the market. In a globally integrated market with external trade being free, steel prices are significantly shaped by the trends in the global market. The global steel market is characterized by the existence of very large excess capacity in steel industry as also in the related raw materials industries. These factors have put pressure on the steel prices and as a result, there has been a continuous fall in the same on the domestic market as well. The steel market is deregulated and the government has no direct control over their prices. However, the government intervenes through appropriate fiscal policy measures to protect the industry from unfairly traded and cheap imports.

This information was given by Minister of State Sh. Vishnu Deo Sai in reply to a question in Lok Sabha today.

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Steel Imports & The Steps Taken by the Government to Protect the Domestic Steel Industry

In a statement laid on the table of the Lok Sabha today the Minister of Steel and Mines Shri Narendra Singh Tomar said that there is no proposal to specifically restrict steel imports from Northern and Eastern countries.

Steel being a deregulated sector, the role of Government is limited to be that of a facilitator for the growth of steel industry in the country. Decision relating to import of various categories of steel etc. are, therefore, the sole decision of the individual steel manufacturer or other stake holders. The increase/decrease in import of steel into the country depend on various factors like demand-supply for various items/grades of steel in the domestic market, fluctuations in value of currency, import regulations etc. As per available data for the last three years, the steel imports have increased significantly in 2014-15 and first half of 2015-16. In order to ensure only quality steel is allowed to import into the country and also ensure adequate supply of raw materials to domestic steel industry the Government has taken the following measures :

(i) To ensure that only quality steel is imported, Government has notified Steel and Steel Product (Quality Control) Order dated 12.03.12 as last amended on 04.12.14.

(ii) The Union Budget 2015-16 has raised peak rate of basic customs duty on both flat and non-flat steel to 15% from 10%.

(iii) Hiked import duty on ingots & billets, alloy steel (flat & long), stainless steel (long) and non-alloy long products from 5 % to 7.5% and non-alloy and other alloy flat products from 7.5% to 10%. This was further revised in August, 2015 on flat steel from 10% to 12.5%, long steel from 7.5% to 10% and semi-finished steel from 7.5% to 10%.

(iv) Government directed in November, 2014 that import of rebars may be strictly as per Steel Product Quality Control Order 2012 to block influx of cheap imports of boron added rebars.

(v) Government has imposed in June, 2015, an Anti-Dumping Duty for five years on imports of certain variety of hot-rolled flat products of stainless steel from China ($ 309 per tonne), Korea ($ 180 per tonne) and Malaysia ($ 316 per tonne).

(vi) In September, 2015, the Government has imposed provisional Safeguard Duty of 20% on hot-rolled flat products of non-alloy and other alloy steel, in coils of a width of 600 mm or more, for a period of 200 days.

Details of Steel are as follows:

Country-wise Import of Steel - Non-alloy, Alloy and Stainless

(Qty : in thousand tons)

Country	2012-13	2013-14	2014-15	2015-16 (April-Oct 2015)
ARGENTINA	2.10	0.53	1.74	0.16
AUSTRALIA	26.72	6.29	9.87	2.83
BAHARIN	12.23	5.04	7.01	2.71
BANGLADESH	0.29	0.10	0.00	0.26
BELGIUM	170.30	95.30	130.92	59.55
BRAZIL	234.97	77.17	146.06	102.48
CANADA	45.80	19.23	9.07	4.79
CHILE	0.10	0.06	0.28	0.16
CHINA	1688.24	1088.44	3610.47	2050.34
DENMARK	10.72	12.74	20.02	8.01
DJIBOUTI	0.41	0.00	0.00	0.62
EGYPT	0.00	0.00	0.00	0
FINLAND	12.38	13.81	11.80	7.49
FRANCE	126.95	36.69	156.38	41.42
GERMANY	573.81	189.71	155.16	133.11
GHANA	0.05	0.04	0.00	0
HONGKONG	3.24	0.65	1.66	2.28
INDONESIA	5.49	2.29	157.49	322.43
IRAN	129.18	127.72	0.00	0
ITALY	85.80	25.59	56.19	19.45
JAPAN	1586.74	1355.68	1601.93	1404.21
JORDAN	0.00	0.15	0.00	0.19
KAZAKHSTAN	14.06	8.12	8.93	4.91
KOREA	1664.32	1320.69	1926.65	1820.27
KUWAIT	20.67	26.06	47.22	2.75
LEBANON	0.37	0.18	0.00	0
MACEDONIA	0.00	0.00	0.00	0
MALAYASIA	48.38	32.83	105.30	57.04
NETHERLAND	27.49	22.12	44.97	12.46
ROMANIA	10.46	26.21	11.14	1.13
RUSSIA	536.17	147.40	228.54	220.63
SAUDI ARABIA	42.48	67.80	4.19	0.44
SOUTH AFRICA	69.04	52.98	98.36	82.05
SPAIN	73.65	21.12	29.67	15.74
SRI LANKA	0.30	0.22	0.12	0.11
TAIWAN	200.06	118.76	190.58	111.78
THAILAND	18.60	21.89	15.93	33.92
TURKEY	36.28	14.14	29.09	0.87
U.K.	80.88	32.59	40.98	26.19
UAE	149.60	54.72	186.27	109.86
UKRAIN	422.74	323.17	349.05	175.51
USA	167.33	103.67	144.19	67.71
Other	418.81	252.55	479.53	4441.41
TOTAL	8717.21	5704.45	10016.76	7199.15

Source: JPC

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Expansion of Steel Plants

Steel is a deregulated sector and investment decisions to expand the existing steel plants or to set up new steel plants are taken by the individual companies / investors based on commercial considerations, market dynamics and techno-economic viability of projects. The steel industry is facing a challenging time due to low steel prices and low profitability, issues related to land acquisition, environmental & forest clearances and availability of finances from the banks and financial institutions.

The production of steel has continued to increase in the last few years. The details of crude steel production and the percentage growth for it the last three years and for the current year are placed below: