Following the Prime Minister setting a target of increasing domestic steelmaking capacity to 300 million tonnes (mt) by 2025, the steel authority of India (SAIL) has requested the Government to set up a dedicated institution to finance capacity expansion in the sector.

At present, the capacity is 77 mt, and with expansion plans already implemented, it is expected to touch 100 mt in the next few years.
 

“The balance 200 mt increase in steel capacity on incremental basis would require huge capital investments — almost about $200 billion. Such massive investments would entail coming together of banks and financial institutions to pool in their resources and come up with a dedicated body to finance these projects on the similar lines of Power Finance Corporation, which is committed to the integrated development of the power and its associated sectors. Therefore, a dedicated financial institution on the lines of PFC in the power sector should be floated by the Ministry of Steel,” said C.S. Verma, Chairman of SAIL, while addressing the CII Steel Summit.

As per estimates a 300 mt capacity would require 400 mt of iron ore. Keeping in mind that many companies are forced to go for import for steel ores owing to the ban in mining in several states, Verma suggested expanding the reserve base through more exploration activities.

“We also need to maximise utilisation of iron ore fines through sintering, pelletising and introducing alternate iron-making technologies that can use fines directly,” he added.