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SRMA STEEL NEWSLETTER

SRMA

Steel Re Rolling Mills Association of India

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Steel Re-Rolling Mills Association of India www.srma.co.in Email : [email protected]

Sl. No, Name

1. Shri B.M. Beriwala, Chairman

2. Shri Jagmel Singh Matharoo, Vice Chairman

3. Shri Ramesh Kumar Jain, Treasurer

4. Shri Sanjay Jain Committee Member

5. Shri Kailash Goyal “

6. Shri Om Prakash Agarwala “

7. Shri Sushil Sharda “

8. Shri Sandip Agarwal “

9. Shri S S Sanganeria “

10. Shri Sanjay Surekha “

11. Shri R P Agarwal “

12. Shri S S Bagaria “

13. Shri Girish Agarwal “

14. Shri Goutam Khanna “

15. Shri Suresh Bansal “

16. Shri Rajiv Jajodia

“

17. Shri Bhusan Agarwal

“

18. Shri Mahesh Agarwal

“

19.

Shri Sita Ram Gupta “

20. Shri G P Agarwal

“

21. Shri Suresh Goyal

“

22.

Shri Hari Mohan Beriwala “

23. Shri Sitaram Agarwal “

24. Shri Sonal Mittal

“

25. Shri Avinash Bagla

“

26. Shri Shankar Lal Agarwal

“

27. Shri Sandip Gupta

“

28. Shri Dilip Agarwal

Special Invitee

29. Shri Vivek Adukia

Special Invitee

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mailto:[email protected]



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Disclaimer :

SRMA Steel News is a division of Steel Re-Rolling Mills Association of India and takes due care in preparing this

news. Information has been obtained by SRMA from sources, which it considers authentic. However, SRMA does

not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or

omissions or for the results obtained from the use of such information. SRMA is not liable for investment decisions,

which may be based on the views expressed in the News. SRMA especially states that it has no financial liability

whatsoever to the subscribers/users/transmitters/distributors of this News. And no part of this news may be

published /reproduced in any form without SRMA’s prior written approval.

Executive Summary

Reality Of Indian Steel

Indian Labour Laws Compliances

Environment & Safety

Taxation/Legal (Circular/Notification)

Events

Latest Steel News

CONTENTS



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Steel is very key & important material. Nature has given us plenty of minerals i.e. iron ore and

coal: steel is the most cost effective material that mankind has developed over centuries. Today,

we are at about 80 MT of consumption and production capacity.

It’s believe that India has this great opportunity to become one of the largest exporter of steel as

a nation because the 5 things required to make steel, all of these 5 Ms are existing in India i.e. we

have trained manpower, we have enough money in the country to make enough steel. We have

the required minerals whether it is iron ore or coking coal, we can buy machines that are not a

problem now we are developing machines in India and we have a large market.

The year 2013-14 proved to be a challenging year for the global steel industry. With the falling

trend in demand from the major consuming sectors like infrastructure, machine building,

automobile, household appliances and other processing industries, the steel industry also

witnessed a falling trend in prices of iron ore, coking coal and scrap, primarily triggered off by a

declining demand from China on the back of ongoing economic transformation from

investment-led to consumption –driven economy.

It is note that GDP in India had clocked a respectable 5.7 percent growth in Q1 of FY 15. The

sustenance and further upward movement of the economy is however dependent on a number of

facilitating movement of critical indicators. Investment as a percent of GDP is maintained at 36-

38% of GDP.

Investment in Infrastructure has a strong steel intensify and the current slow down in investment

does account for a major drop in rate of growth of steel consumption. Manufacturing and

processing industry has been showing a stagnant share of 14-15 per cent of GDP in India. The

long term goal is to take this share to 25 per cent by 2025 by more investment in creation of

manufacturing zones and setting up of industrial corridors.

There is also challenges faced by Indian steel industry in the concern the raw material

availability in right quantity and quality and at the competitive price has become critical. While

global excess capacity continues to drive down the growth of the industry, India is planning to

augment crude steel making capacity from the current level of 100 MT to around 300 MT by

another decade and half.

This includes 129 MT in brownfield and 81.0 MT in Greenfield capacities. It is expected that the

domestic demand growth and export potential of Indian steel along with steel-intensive

engineering exports (renamed as indirect export of steel) would be adequate to absorb the

incremental availability of steel by 2030.



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REALITY OF INDIAN STEEL

A country made of a billion people (with zillion dreams) has a

GDP of USD 1.7 trillion; 2% of this owes to Steel. Hence, the

significance of this 2% is immense. It corresponds to a common

Indian’s dream of building a house, buy a car, get latest

electronics, or buy stainless steel for domestic use. A common

Indian dreams about getting it all, cheaper, better & more, true

even in context of steel.

The Indian Steel sector has proved to be one of the most stable and progressive

in the world, as it was among the few nations that had a positive CAGR in 2013

(as per the WSA report). With 81 MnT Crude steel production, it is world’s

fourth largest producer and in years to come might overtake Japan & US to move up to second in the list. There’s

going to be bullish expansion; whose plans are chalked out till 2020 and 2016 will carry the vibes.

These expansions would not only results in production of more steel, they will also boost competition. Prices will

decline owing to mass production via the BF route; quality will get better. Since 2013 till now, there have been

fewer signs of revival, and the eclipse continues to spread on the raw material used in Steel. Interrupted mining

operations in most of the Iron ore producing states followed by Coal blocks which were declared illegal, raw

material situation in the country has seldom been normal in the few years. But, we still managed to produce about

8.2 MnT of Steel i.e. about 4% higher compared to FY13. During the same period, GDP grew by 5.63%

Steel in India – FY16

FY15 & FY16 are to witness good number of Crude steel installation across India. Mostly, the growth will come

via the BF route. SAIL & RINL each have a plan to ramp up by 3 MnT and Tata Steel & Bhishan plan to expand

Crude steel capacity by 1 MnT each. This will add up 8 MnT of installed capacity to India’s portfolio. In addition,

there are a few EAF capacity planned by JSW, JSPL, RINL & SAIL. Looking at such installations, we’ve adjusted

the CAGR to little above 4% Y-o-Y, owing to bullish expansions of steel giants. Perhaps, India will make more than

90 MnT of Crude steel in Fy 16.

Indian Steel Blueprints The capacity utilization might be close to about 82% in FY16. The average rate between FY10 & FY14

was close to 84%

The decline in utilization rate from the average will be owing to the time lag required to optimize a reactor

(BF) before it reaches to the best output.

The utilization rate over the coming years are bound to increase owing to Blast Furnace set ups. On an

average, a blast furnace operates at 90% of its capacity.

Till FY13, India witnessed major expansions through IF & EAF routes and perhaps the market is now

saturated. However, BF route will be more attractive option in the times to come.

Various Steelmaking Routes The EAF & IF capacity has gradually increased over the past few years. During FY10, Steel via EAF

contributed about 16.46 MnT and IF contribution was close to 19.7 MnT. These capacities ramped up to 18

MnT via EAF and 26.6 MnT via IF in Fy13.

Most of the secondary manufacturers operate ifs in India and there are about 47 EAFs as of now. IF will not

get to see scale in the coming years but EAF will.

Many primary manufacturers are coming up with BF and their product is going to dominate in the market

Obviousness that comes with BF installation, is their need to remain operational and the companies will

operate at their best possible level, at all cost.



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With elevated production level, there will be enough availability of

material and hence will invite strong competition.

Secondary steel manufacturers might have to face the pressure

Steel Consumption

Imports

Owing to the increase in domestic supply, import might decline

Exports

One might see finish, semi-finish, pig iron exports increasing during

FY16 because BF units might continue to produce throughout

Indian will most likely be a net exporter of Steel by Fy16

The surge will be owing to two reasons

India use to depend on other countries for its requirement of auto grade steel, which it can very well

produce now

The elevated production level might easily meet Indian consumption giving room to the export market to

flourish.

Consumption

According to WSA, consumption of Steel might increase to 3. 8% in year 2016 . It is worth noticing that

during FY14 consumption increase only by 2%

The real consumption of steel declined owing to many factors such as bans. BIS, elections etc. In the

coming years, the situation might ease and demand may grow.

Steel Prices Production of Steel will surpass the demand in the domestic market

This will exert pressure on Steel prices and we might not see any surge in the next few years

The price difference between Primary and Secondary producers will narrow down, which might toughen

competition

Owing to steel output via BF route, quality output might add to the factors that determine prices. Primary

manufacturers will have a opportunity to position their product on the basis of better quality at lower prices.

Iron ore production has fallen down because of mining ban in Karnataka, Goa, Odisha & Jharkhand.

Total Iron ore output will be close to about 150 MnT by FT16. Odisha will remain the highest contributor

of Iron Ore. In addition, Goa miens will start operations and Karnataka’s Iron ore production will increase.

Export might increase to 15 MnT by FY16 owing to increased contribution from mines in Goa.

Imports will stay around the same level i.e., close to 8-10 MnT.

Iron ore Prices Prices in the domestic market will be under pressure owing to slowdown in the global market. The global

market remained in the range of USD 80-90 per MT CFR China diring Q2 FY15.

Prices gap between Iron ore lumps & fines will narrow down further and might just remain close to about

USD 15 per MT.

During FY16, Pellet manufacturers profit margins might be hit owing to these price pressures.

Imports will have some restrictions owing to the lag in infrastructure i.e. we might have enough material to

export but it has to stay due to the lack of proper port facility.

Source : Steel 360 TOP



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INDIAN LABOUR LAWS COMPLIANCES

The Apprentices Act, 1961

Applicability: It is a statutory obligation of every industry/establishment having training facilities according to syllabus in a designated trade under the Apprentices Act, 1961 to train a number of apprentices according to ratio of the trade in their establishment.

Major Compliance: 1) General Obligations: a) To provide the apprentice with training in his trade in accordance with Act and rules. b) To ensure that a qualified person is placed in charge of the training. c) To carry out obligation under the contract. 2) Registration of contract of apprenticeship: To send the apprenticeship advisor the contract of apprenticeship within 3 months of date on which it was signed. 3) Payment to apprentice: To pay to every apprentice during the period of apprenticeship such stipend at a rate prescribed under the Act. 4) Working hours for apprentice: a) Total number of hour: 42 to 48 hours per week. b) Trade apprentice undergoing basic training: 42 hours.

c) Trade apprentice undergoing 2nd year: 42 to 45 hours.

d) Trade apprentice undergoing 3rd and subsequent years: As per the workers in the trade in

the same establishment. e) No trade apprentice shall be engaged between the hours of 10 p.m. to 5 p.m. without the permission of Apprenticeship Advisor. f) Graduate or technician apprentice: Normal hours of work of the dept. 5) Health, welfare and safety of apprentice: as per Factories Act. 6) Compensation for injury: as per Workmen Compensation Act. 7) Compensation for termination of apprenticeship: 6 months’ last drawn stipend by both parties



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ENVIRONMENT & SAFETY National Environmental Policies. In addition to the Constitutional mandate,

India has a number of national policies governing environmental management,

including the National Policy on Pollution Abatement (NPPA, 1992) and the

National Conservation Strategy and Policy Statement on Environment and

Development (NCS/PSED, 1992). While these national policies are not

judicially enforceable, they serve as guiding principles for the central and state

governments to follow.

The NPPA encourages the use of economic instruments to complement

traditional command-and control approaches to pollution abatement. To

integrate environmental considerations into decision making at all levels, the

policy adopts the following guiding principles:

• prevention of pollution at source;

• adoption of best available technology;

• the polluter pays principle; and

• public participation in decision making.

India has an elaborate legal framework with over two hundred laws relating to environmental protection. Key

national laws for the prevention and control of industrial and urban pollution include the following:

• Water (Prevention and Control of Pollution) Act of 1974, amended in 1988

• Water (Prevention and Control of Pollution) Cess Act of 1977, amended in 1991

• Air (Prevention and Control of Pollution) Act of 1981, amended in 1987

• Environment (Protection) Act of 1986 (EPA)

• Public Liability Insurance Act of 1991

• National Environmental Tribunal Act of 1995

• National Environmental Appellate Authority Act of 1997

The medium-specific legislation (the Air Act and the Water Act) empower the central and state pollution control

authorities to enforce emission and effluent standards for industries discharging pollutants into air and water. The

Water Cess Act, among other things, stipulates the use of fees for water abstraction.

The Water Act vests regulatory authority in State Pollution Control Boards to establish and enforce effluent

standards for facilities discharging pollutants into water bodies. The CPCB coordinates activities between the states

and performs regulatory functions for union territories. The central and state boards were authorized to control

domestic and industrial discharge via consents to establish (CTE) and consents to operate (CTO) and to advise state

governments on sitting of industrial projects.

The Air Act provides for the prevention, control and abatement of air pollution. With a framework similar to the

Water Act, the Air Act gave the central and state boards authority to issue consents to industries operating within

designated air pollution control areas. States also prescribe emission standards for stationary and mobile sources.

The EPA both articulates a policy for environmental protection covering air, water and land and provides a

framework for central government coordination of central and state authorities established under previous laws,

including the Water Act and Air Act. Under this umbrella law, the central government must set national ambient and

emissions standards, establish procedures for managing hazardous substances, regulate industrial sitting, investigate

and research pollution issues, and establish laboratories and collect and disseminate information.

The National Environmental Appellate Authority Act of 1997 requires the central government to establish an

authority to hear appeals on area restrictions where industrial operations will not be carried out or will be carried out

with certain safeguard measures. In 2005, Parliament enacted the 10 Right to Information Act designed to promote

greater transparency and accountability of the government and public participation in decision-making.

TOP



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TAXATION/ LEGAL NEWS Circular No. 181/7/2014-Service Tax

F. No. 137/46/2014-Service Tax Government of India - Ministry of Finance

Department of Revenue - Central Board of Excise and Customs

New Delhi, the 10th December, 2014

To, All Principal Chief Commissioners / Chief Commissioners of Central Excise/Service Tax Principal Directors General/ Director General Service Tax/ DGCEI/Systems/ Audit All Principal Commissioners/Commissioners of Central Excise/Service Tax

All Principal Additional Directors General/ Additional Directors General Audit

Madam/Sir Sub: Audit of the Service Tax assessees by the officers of Service Tax and

Central Excise Commissionerates Section 94 of the Finance Act, 1994 deals with rule making powers of the Central Government in

relation to service tax. Sub-section (2) of section 94, dealing with specific purposes for which

rules can be made, was amended with effect from 06.08.2014, vide Section 114(J) of the Finance

Act, 2014, and a new clause (k) was added to sub-section (2) of section 94, which is reproduced

below – “(k) imposition, on persons liable to pay service tax, for the proper levy and collection of tax, of duty of furnishing information, keeping records and the manner in which such records shall be verified.” 2. In exercise of the rule making powers under clause (k) of sub-section (2) of section 94 of the Finance Act, 1994, the Central Government has inserted a new rule 5(A)(2) in the Service Tax Rules, 1994 vide notification no. 23/2014-Service Tax dated 5

th December, 2014. This

rule, interalia, provides for scrutiny of records by the audit party deputed by the Commissioner. Such scrutiny essentially constitutes audit by the audit party consisting of departmental officers. 3. Verification of records mandated by the statute is necessary to check the correctness of assessment and payment of tax by the assessee in the present era of self-assessment. It may be noted that the expression “verified” used in section 94(2)(k) of the said Act is of wide import and would include within its scope, audit by the departmental officers, as the procedure prescribed for audit is essentially a procedure for verification mandated in the statute. 4. It may also be noted that the Hon’ble High Court of Delhi in the judgment dated 04.08.2014 in the case of M/s Travelite (India) [2014-TIOL-1304-HC-DEL-ST] had quashed rule 5A(2) of the Service Tax Rules, 1994 on the ground that the powers to conduct audit envisaged in the rule did not have appropriate statutory backing. This judgment can now be distinguished as a clear statutory backing for the rule now exists in section 94(2)(k) of the said Act. 5. Departmental officers are directed to audit the Service Tax assessees as provided in the departmental instructions in this regard. Difficulty, if any, in implementing the circular may be brought to the notice of the Board. Hindi version will follow.

(Himani Bhayana)

Under Secretary (Service Tax)



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EVENTS

INDINOX Stainless Steel Conference 2015

25 - 26 January 2015

Mahatma Mandir, Gandhinagar

Ahmadabad, Gujarat, India

“A window to meet Indian miners and producers to explore business opportunities during one of

the most prestigious stainless steel event of the year”

Metal Recycling Association of India ( Voice of the Indian Recycling Industry )

5&6 February, 2015 - MUMBAI [email protected] Phone : 022-65754321 Fax : 022-67259555 / Visit www.mrai.org.in/imrc2015/ to register online.

Iron Ore Beneficiation Africa

16-17 March 2015 | Radisson Blu Gautrain Hotel, Johannesburg

6th

Year Steel | Power | Cement | Mining National Expo 2014 12,13,14-Dec,2014

BTI Ground, Shankar Nagar, Raipur

Indore Infoline Pvt. Ltd. Manish Sinha Branch Head 406, 4th Floor, Ashiana Trade Centre, Adityapur, Jamshedpur-831013, Tel: 0657-2383186, 6551021, Mob: 9263350107 / 9334080525, Email: [email protected], [email protected]

The 18th Annual Global Iron Ore & Steel Forecast Conference & Exhibition will be held in

Perth on the 10-11 March 2015.

(This event is renowned as the world’s largest gathering of senior iron ore and steel executives

with thousands of industry personnel attending it over the years. It is recognised as the

conference that delivers vital information on the status of the global iron ore and steel sectors.).

TOP






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STEEL NEWS

ICRA expects fragile recovery in Indian steel demand ICRA Limited, an associate of Moody's Investors Service, in a recently released report “INDIAN STEEL

INDUSTRY - Benefits of low raw material prices partly neutralised by cheaper steel imports” outlines that any

significant pick up in domestic steel demand can at best be gradual, as demand recovery from key end user

industries remains fragile, despite a growth in the automobile sector in the current year.

Steel Consumption

Domestic steel consumption growth remained nominal at 1.3% during the period April-November 2014. Weakness

in domestic demand from key end-user industries persisted in the current year, and the same was reflected by a low

consumption growth of 0.5% only during the period April-October 2014. The demand growth has remained largely

unchanged from 0.6% witnessed during FY14. As demand recovery from construction and capital goods sectors

remains fragile, ICRA believes that any significant improvement in steel demand can at best be gradual, despite a

growth in the automobile sector in the current year.

Steel Production

On the supply side, although steel production trend tracked declining consumption pattern, it still remained higher

than the demand growth, at 2.5% during the first 8 months of FY15.

Inventory Build Up

Higher production growth relative to consumption levels and rising imports also point towards an inventory build-up

in the steel market

Cheaper Imports

Moreover, the substantial discount at which imported steel is available in the country led to a surge in imports of

steel, which reported a growth rate of almost 49% during the period April-November 2014

Declining Exports

Steel exports, which had grown by over 20% during April-May 2014, slowed down subsequently to post a meagre

growth rate of 1% during April-October 2014.

Net Importer

This has led to India becoming a net importer of the metal as against its status as a net exporter in FY14.

Sponge Iron

Sponge iron players would, however, face a challenging operating environment, with international scrap prices

remaining soft and raw materials remaining in short supply. The recent coal block de-allocations have increased the

uncertainties for the sector, as replacing captive coal by imports or e- auctions would significantly increase the cost

of production of sponge iron.

Coking Coal

Even though the Indian currency has depreciated significantly recently, landed cost of imported coal in FY15 is still

cheaper than that in the previous year. Similarly, domestic and imported metallurgical coke prices have also

remained depressed, helping many blast furnace players who directly purchase met coke. ICRA expects coking coal

prices to remain low in the near term, given the oversupply situation internationally, and expects coking coal costs

of Indian blast furnace operators to reduce by around 15% YoY for every MT of crude steel production during

FY15.

Iron Ore

International iron ore prices have seen a sharp decline of over 40% in FY15, driven by a weakening of demand from

China, and prospects of higher supply following capacity expansions by large global mining companies. Domestic



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iron ore production, however, continues to suffer from regulatory restrictions, keeping domestic iron ore prices at

elevated levels, notwithstanding some moderations in recent months. This has led to higher iron ore imports in the

current year. Given the steep decline in international prices and economies of scale associated with bulk imports,

some of the large Indian players with plants near ports are expected to increase imports till domestic production

finally recovers.

Profitability

Although pricing pressures from cheaper imports and supply shortages in iron ore are likely to stay in the near term,

ICRA expects the profitability of domestic steel players to remain stable on the back of softer raw material prices,

and a gradual recovery of demand in some of the end-user industries. However, debt protection metrics are not

expected to improve significantly due to the high debt levels of companies, and the fact that interest rates would still

remain at elevated levels in absolute terms, notwithstanding an expected moderation in the current calendar year.

Source - Strategic Research Institute, Steel Guru

Get latest updates through Twitter - Follow @MinesGuru

( www.minesguru.com)

India to be the 2nd largest producer of steel in 2015-16 – Study (Follow @steelguru on Twitter for important updates)

Economic Times reported that India is expected to become the world's second largest producer of crude steel in

2015-16, moving up from the fourth position, as its capacity is projected to increase from 100 million tonne to about

112.5 million tonne in 2015-16.

A sectorial analysis by Frost & Sullivan's Metals & Mining Practice said that "All indicators suggest that India will

soon move up to the second position both in production and consumption."

It said “With infrastructure development and automotive industry driving steel demand, production is expected to hit

140 million tonne by the end of 2016, while consumption is expected to grow 6.8% to reach 104 million tonne by

2017.”

According to the analysis, “The Indian steel industry is forging ahead despite chronic handicaps like poor

infrastructure. The government is working proactively to provide incentives for economic growth by injecting funds

in construction, infrastructure, automotive and power, which will drive the steel industry in the future."

With nearly all major domestic steel producers in the process of adding a mix of brownfield and greenfield capacity,

the total planned capacity hike in crude steel production till 2017 is estimated at well over 100 million tonne. The

report said that SAIL is adding 27 million tonne, comprising 21.4 million tonne of brownfield and 5.6 million tonne

of greenfield capacity. TATA Steel, too, is poised to add substantial greenfield capacity. While JSW Steel is adding

12 million tonne of brownfield capacity, JSW Ispat and Essar Steel will add another 4.5 million tonne and 10 million

tonne of brownfield capacity. Rashtriya Ispat Nigam Ltd (RINL), which runs the Vizag Steel Plant, is slated to add 7

million tonne of new capacity, while mining major NMDC's new steel plant at Nagarnar in Chhattisgarh will add

another 3 million tonne of new steelmaking capacity. Monnet Ispat, Visa Steel and Electrosteel are also set to add

3.5 million tonne, 3.75 million tonne and 2.5 million tonne of additional greenfield steel capacity.

However, Frost & Sullivanadded in its analysis that domestic producers will face challenges in securing iron ore and

coal, two major inputs for steel and issues related to mining. Delays in land and environmental clearances, threat of

increasing imports from China and Commonwealth of Independent States countries may also restraint growth

prospects.

http://www.minesguru.com/



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While total installed capacity for crude steel in 2013 was 102 million tonne, capacity utilisation was about 80%.

Source - Economic Times

Get latest updates through Twitter - Follow @steelguru

(www.steelguru.com)

OMC wants 51pct stake in ultra mega steel project

(Follow @steelguru on Twitter for important updates)

Business Standard reported that state controlled miner Odisha Mining Corporation is keen to have 51% stake in the

ultra mega steel project (UMSP) proposed in the state in JV with country’s top iron ore producer National Mineral

Development Corporation.

Apart from OMC and NMDC, the special purpose vehicle (SPV) to implement the project will have state’s land

acquisition agency, Odisha Industrial Infrastructure Development Corporation (Idco), as thir partner.

Mr Girish SN MD of OMC said that “At a recent meeting, we have communicated to the state government that we

are keen on 51% stake in the ultra mega steel project. Now, the government has to take a call. Being a JV with a

prestigious central PSU, this is an important project for us.”

The steel mill, with a projected capacity of 5 million tonne per annum to 6 million tonne per annum, is likely to

come up under Patna tehsil in Keonjhar, the site earlier identified for the 12 million tonne steel plant by

ArcelorMittal. Since ArcelorMittal has already scrapped its project, the land is proposed to be used for the ultra

mega steel plant in the state.

NMDC has already submitted a draft tripartite memorandum of agreement to the Odisha government. The

government has conveyed its in-principle approval to form SPV by NMDC, OMC and Idco. But progress on the

project is stuck since both NMDC and OMC are vying for a controlling stake in the SPV.

The Union steel ministry has identified two sites in Odisha, both in iron ore rich Keonjhar district, for establishment

of mega steel mills, which are planned to help meet the ambitious domestic steel output of 300 million tonne per

annum by 2025.

In its proposal, the steel ministry had argued that setting up these plants will bridge the widening demand-supply gap

of the metal, since imports were rising. It had also proposed a Steel Finance Corporation (SFC) as a special purpose

vehicle on the lines of Power Finance Corporation to finance the projects on a fast-track basis in the next few years.

The SFC was to have an initial corpus of INR 1,500 crore and would be conferred the status of a non-banking

financial company.

Source - Business Standard - Get latest updates through Twitter - Follow @steel guru - (www.steelguru.com)

India : Cabinet approves Ordinance for Mines Auction – PTI 5

th January 2015 Posted by Steelmint Admin

“The Cabinet on Monday approved an ordinance for auction of iron ore and other minerals, yet

again opting the emergency route that was adopted for coal, insurance and land acquisition

reforms.

http://www.steelguru.com/




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“The cabinet has approved promulgating an ordinance to auction iron ore and other minerals,” a

government source said after the meeting of the Union Cabinet chaired by Primary Ministry Narendra

Modi here.

The ordinance would pave the way for introduction of competitive bidding for allocation of iron ore and

other non-coal mines. It will also enable creating District Mineral Funds for the welfare of the project-

affected people.

The need for taking the ordinance route was felt as the government was finding it difficult to allocate

mines, because the Mines Ministry could not able a Bill in the Winter session of Parliament to amend the

Mines and Minerals (Development and Regulation) Act, 1957.

The government intends to bring in transparency and wants to continue mining in the country. There are

a lot of pending cases and for the past 4-5 years, iron ore sector has been facing crunch in terms of

mining. The lease will last for 50 years and there will be no deemed extension or renewal. Any renewal

case which is pending will get 15 years of moratorium for captive users and 5 years for non-captive users

through PSUs which have these mines would not be affected.

Ordinance passed to auction natural resources in India (Follow @MinesGuru on Twitter for important updates)

Indian government has passed an executive order on Monday to allow the auction of mineral

resources ending monopolistic practices and bring about greater transparency in allocation of

natural resources..

The cabinet approved an ordinance amending the mines and mineral development and regulation

act, which will allow iron ore and other major mineral bearing blocks to be auctioned to user

industries, instead of being granted through allocations. An ordinance is an emergency measure

that has to be passed by the next parliamentary session.

The government will decide on the rules of the auction, which will be similar to those for coal.

The states will conduct the auction and will get the revenues from the sale. It will also enable

creating District Mineral Funds for the welfare of the project affected people. India used to hand

over mining licences to firms without any competitive bidding

Industry body Federation of Indian Mineral Industries, however, has been opposing the auction

route, saying it would sound the death knell for the industry and may lead to cartelisation and

waste. FIMI contends that “The auction route was not pursued in any resource rich country as it

may result in cartelisation and monopolistic practices. The auction route may also lead to

selective mining while leaving low grade minerals in the ground, wastage of resources and

inflate the cost of final product.”

Source - Strategic Research Institute, Steel Guru - Get latest updates through Twitter – Follow

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