iron and steel : strengthening india - srma · 2014-07-14 · page 4 of 15 18th issue steel re...
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SRMA STEEL NEWS
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Association of India www.sram.co.in
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
5. Shri Kailasj Goel
6. Shri G P Agarwal
7. Shri O P Agarwal
8. Shri S K Sharda
9. Shri Sandip Kumar Agarwal
10. Shri S. S. Sanganeria
11. Shri Sanjay Surekha
12. Shri R P Agarwal
13. Shri S. S. Bagaria
14. Shri Girish Agarwal
15. Shri Goutam Khanna
16. Shri Suresh Bansal
17. Shri Rajiv Jajodia
18. Shri Bhusan Agarwal
19. Shri Mahesh Agarwal
20. Shri Sita Ram Gupta
21. Shri Ashok Bardeja
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Executive Summary
Raw material shortage, land acquisition key concerns of
SteelMin.
Energy Efficient Technology on SRRM Industry
Environment & Safety Focus
Taxation News
Events
Latest Steel News
CONTENTS
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The production of Global steel drive picked up in CY13, demand outlook however remains muted: The global
crude steel production grew by almost 4% during the first 11 months of CY13, and around 50% of this production
was contributed by China. This reflects an improvement over the 1% production growth rate achieved in CY12.
However, with Chinese Government’s focus being expected to shift from infrastructure spending to stimulating
domestic consumption, Chinese demand. for steel in unlikely to grow at the historical high rates going forward.
Consequently, the World Steel Association predicted a slower growth rate of around 3% in CY 14 as against double
digit rates earlier. Additionally, although the economic outlook for the USA and EU has started improving of late,
steel demand growth from these economies is expected to improve only modestly in the near term. Steel prices in
the USA and EU have reacted positively to the prospects of better economic conditions, while Chinese steel prices
have remained weak, given the substantial excess steel capacity in the country, and a waning growth in demand.
The domestic demand progress has slowed down sharply in the current year: Persistent weakness in demand from
key end-user industries kept the domestic steel consumption growth at a meagre 0.5% during the period April-
December 2013. After registering a year-on-year (YoY) growth of 0.8% in the first half of 2013-14 (H1FY14), steel
consumption growth in India registered a decline of 0.15% in Q3FY14. As a result, ICRA expects the domestic steel
demand to grow at a slower pace in FY14 than the 3.3% growth rate achieved in FY13, notwithstanding a typical
pick-up in demand in the last quarter. On the other hand, double digit production growth rates clocked by the main
steel producers1 in April-December 2013 resulted in a domestic steel production growth of 5.2% during the same
period. The mismatch in domestic supply and demand necessitated higher steel exports, which also benefitted from
favourable exchange rate conditions. This led to an export growth of 9.5%, while steel imports crashed by 29.2%
during the period.
Indian iron ore prices turn down in H1FY14 before showing some increase in recent months, trends in other raw
material prices remain favourable for steel producers: Domestic iron ore production declined continuously over the
last three years, and the trend has been continuing in the current year as well on account of various restrictions in
key iron ore producing states. While the Supreme Court has allowed Category A and B mines in Karnataka to
resume mining operations in the state, the requirement of fulfilling various conditions has resulted in only a limited
number of mines commencing operations till now, leading to a significant supply shortage in the state. Mining in the
state of Goa continues to be banned, while the report of the Shah Commission on the status of iron ore mining
industry in Odisha has been submitted to the Central Government, and the outcome is awaited. However, any
significant restriction imposed on mines in Odisha may at least partially offset potential gains from resumption in
mining in Karnataka going forward. Despite falling supplies, domestic iron ore prices nevertheless declined over the
last one year, notwithstanding an increase effected by National Mineral Development Corporation Limited (NMDC)
in October and December 2013 by a cumulative Rs. 300/ tonne.
It is to be renowned that despite such increase, domestic lump ore prices are ruling at levels which are 10-15%
lower than the rates one year back. This is because of the ongoing downturn in the steel industry, leading to a
nominal production growth for steel players without captive iron ore mines, thus keeping the demand for iron ore
from merchant miners under check. The domestic steel industry continues to remain under stress; margins are
however expected to improve going forward: Weak price trends, coupled with slower demand growth ruled out any
improvement in the operating profitability of Indian steel makers in Q2FY14. Indian steel players however has
improved, given the soft price trends of key raw materials. A further price hike announced by the industry in
January 2014 should also help, provided a weak steel market can absorb such a price hike. The steel industry being
highly raw material intensive, ICRA expects the near term benefits from lower raw material costs to more than
neutralise the adverse impact of a low volume growth, even if a part of the benefits of lower costs are passed on to
customers to protect sales volumes. Over a longer term, volume growth however would be critical, given that
substantial fresh capacities are likely to be commissioned in the next two years. Unless demand conditions improve
significantly, overall capacity utilisation levels and profitability of steel players would remain impacted.
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Source : The Pioneer, New Delhi 02.06.2014
A cute shortage of raw material in plants,
roadblocks in the land acquisition process
hampering Greenfield expansion of State-owned
entities and problems arising from imports of iron
ore are some of the key concerns which the Steel
Ministry officials have earmarked before the new
minister Narendra Singh Tomar.
According to official sources in a presentation
made before Tomar, who took charge of the
Ministry last week, top Steel Ministry official
officials briefed him about the global steel
scenario, and the concerns being faced by PSUs
which come under their jurisdictions.
The Minister, sources added has asked his officials
to brief him separately on all the three PSUs which
come under the Steel Ministry namely Steel
Authority of India Ltd. (SAIL) Rashtriya Ispat
Nigam Ltd. (RINL) and NMDC. Subsequently the
presentations on all the three company will be
made before the ministry later this week.
Owing to ban on iron ore mining in Goa and
Karnata as well as the recent Supreme Court
directive ordering shutting down of mines involved
in illegal mining in Odissa miners – both public as
well as private have been facing acute shortage of
raw material mainly Iron ore.
Source pointed out that through bans imposed by
the SC in Goa and Karnataka are gradually being
removed in a phased manner, the recent one
imposed on mines In Odisha has hit the miners
hard.
Mines owned by SAIL and Tata Steel in Odisha
have been hit as operations in them have been
suspended sources told The Pioneer. The apex
court had on May 16 while ordering closure of
mines involved in illegal mining in Odisha, imposed restrictions on operations of 26 mines,
mainly those whose leases had not been renewed
since decades.
Subsequently a high-powered committee of the
State Government had suggested renewal of leases
of the 13 out of these 26 mines, but only after they
fulfilled three condition – Paying the penalty for
excessive mining getting permission for total
diversion of the forest land within the lease area,
and seeking clearance for using tribal land.
Official sources said that through some mines may
reopen the overall problem of raw material
remains and it has gradually become a major issue
for State-owned companies like – SAIL.
Land acquisition is another issue which the Steel
Ministry has been facing as owing to local as well
as law and order factors seeking land for
Greenfield expansion of PSUs has become a
problem. Also delay in environmental and forest
clearance of projects belonging to SAIL and
RINL has hit output of these companies.
On top of this the import of cheap raw material
from countries mainly Chaina has also provide to
be a major headache for the Steel Ministry,
Industry source said that despite of the fact that
India has abundant stock of Iron ore the Mines
Ministry’s insistence of exporting iron ore has led
to greater dependence on imports which in turn
has hurt the interest of domestic steel industry.
Iron ore export being a bone of contention
between Steel and Mines Ministries, Tomar, who
is the minister for the both the departments had
last week assured that all contentions issues
between the two ministries will be looked into and
resolved by creating better synergy between them.
The minister is also learnt to have conveyed to the
Steel Ministry officials that being a PSU centric
department it should not worry about any external
pressures and continue to function independently.
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Ex
Continue from Previous issue >
REVAMPING / MODERNIZATION OF EXISTING PUSHER FURNACES
Special Features
Temperature Control -through microprocessor based PID controller - efficient burner with automatic control of fuel air ratio Pressure Control -Automatic control based on microprocessor PID -Furnace pressure maintained slightly positive (+1mm) High Efficiency Metallic Recuperator -High efficiency 2 –pass multi tubular recuperator with safety features like dilution air blower, hot air bleeding system Improved Refractory Lining %age oxygen analyzer -Mounted on flue gas header after recuperator –to monitor oxygen %age -Indicator for excess air in furnace
Proposed Special Features Saving fuel &
Scale
Investment Payback
Replacement of
existing PHF
Most common
Fuel oil consumption 40-45% / tonne
Scale loss 2.0-4.5
No automatic control of temperature
Pressure
Combustion air preheating
temperature 150-160oC
-
Fuel ~ 4-5
liters, Scale
Fuel ~ 0.5%
Approx 50
Lakhs
4-5 months
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COMPLETE CHANGE OF REHEATING LINING
High energy loss through ceiling, side walls and hearth due to
Poor lining condition
Improper lining material
Insulation replacement –skin temperature exceeds 100-1200C
Wall insulation thickness –450 –500 mm
Wall insulation –45-60% alumina brick, hot face insulation, cold face insulation and
block insulation
Ceramic fibre with low thermal conductivity and low density used
Furnace hearth –high duty high alumina refectory bricks / chrome / magnesite / aversive
bricks
Ultra low cement castables
CERAMIC FIBRE VENEERING
Ceramic fibre veneering modules (50 mm thick) application as hot face insulation except at height of about 160-170 mm of side walls from the hearth in the preheating zone of existing furnaces will reduced the heat losses. Furnaces, which is operated for one or two shifts per day, application of ceramic fibre modules as hot face insulation will reduce the start up time and fuel requirement
Proposed Special Features Saving fuel &
Scale
Investment Payback
Application of
Ceramic Fibre
Veneering
Veneering is done in the
furnace zone where the
temperature is below 12000C
When veneering is adopted in
the small scale re-heating
furnaces of 5-10 t/hr capacity,
about 75 % of the area can
veneered leaving the areas
close to the flame
Fuel overall
(start up + running ) ~ 1
liters
Approx 2 lakhs @ 2000/- per m2 for 5-10 tph furnace
Source UNDP
Proposed Special Features Saving fuel &
Scale
Investment Payback
Improved
Refractory
Design with
Ceramic Fibre(s)
Ceramic fibre material reduces heat
loss through the walls
Ceramic fibre has a low thermal
mass, heat loss due to daily
heating and cooling is reduced
Fuel ~ 3 - 4
liters Approx 20
Lakhs
8-10 months
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Health at work place and healthy work environment are amongst the most
valuable assets of individuals, communities and countries. In the light of
rapid economic growth and industrial progress in our country, it becomes
imperative that safety and health at the workplace be given its due
importance. However, with stress being laid on quick profits, safety aspects
are generally ignored. It is only with the increase in the number of people
killed and injured at work that the significance of the problem has been
realised.
The lackadaisical attitude of the Indian policy makers has made the situation
even worse. The enforcement of legislative measures and their active
implementation is also very poor. So the need arises to develop a proper
infrastructural status in India for occupational health and safety.
It is only recently that there has been a shift in approach to the problems of occupational health and safety. Instead
of investigating accidents after they have occurred, taking a high toll of human life, it is now felt that preventing the
occurrence of industrial disasters and occupational diseases is a much better idea.
So to ensure a self-enforcing environment, where assurance of occupational health and safety is the norm rather than
an afterthought, a positive, strong infrastructure has to be developed. This necessitates a reorientation not only in the
minds of the employers and the government, but also in the attitudes of the employees and the general public. An
integrated approach is to be adopted to have a healthy and hazard free industrial environment.
INDIAN INDUSTRIAL SCENARIO
Industrial Scenario - With the growth of industries in India, the number of occupational injuries and deaths have
also increased. Introduction of hazardous machinery, toxic chemicals, high rise construction, unprotected machinery,
poisoning and burns form manufacture of chemicals, etc., are the main cause of injuries and deaths in the Indian
industries – both organized and unorganized sectors. The condition of occupational health and safety in the
inorganised sector is more grim as compared to that in the organized sector.
The labour inspectorates are ill-equipped and do not have technically and professionally competent manpower for
inspecting, reporting on prevailing work conditions in the industry and to monitor occupational health hazards.
Health Scenario - In India, occupational accidents, traditional physical ad ergonomic hazards and occupational
diseases are important factors influencing the health of the industrial workers.
Diseases like byssinosis and pneumoconiosis are rampant among the industrial workers in India. Among other types
of occupational diseases prevalent in India are diseases of the circulatory system, digestive system, urinary tracts,
nervous system and sense organs (hearing loss, CNS effects), blood diseases, etc.
However, the present health for the Indian workers are not adequate enough to cope with the ever-increasing
occupational diseases and health problems. The only health facilities offered specifically to the workers are the
health centres under the Employees’ State Insurance Scheme.
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Indian Legislative Measures - A large number of labour legislations have
been enacted for the promotion and protection of worker’s welfare. The factories Act, 1948 and the Workmen’s
Compensation Act, 1923, are specifically directed towards occupational health and safety matters.
The Factories Act aims at ensuring adequate safety measures and promoting the health and welfare of the workers
employed in factories. The Workmen’s Compensation Act makes the employer liable for providing compensation to
his employees in case of occupational diseases or personal injuries and prescribes the manner in which his liability
can be ascertained. The Act provides for cheaper and quicker mode of disposal of disputes relating to compensation
through special proceedings.
The Employees’ State Insurance Act provides for cash benefits and/or medical facilities to insured employees in
case of sickness, maternity, disablement and death due to injury.
Despite all these statutes, the health and safety scenario in the Indian industry remains unsatisfactory. Workers in the
unorganized sector are scarcely able to take advantage of the provisions under these acts.
The Social Aspects of Occupational Health and Safety - Variations in economic structure, social set-up,
conditions of work, quality of the work environment all have an impact on the standard of occupational safety and
health. As such the social aspects have been considered while assessing the health and safety status of the industrial
workers. There are also special occupational settings and types of enterprises, economic activities and undertakings
in which work and workplace deviate substantially from the norm. Major changes in social and economic systems
result in weakening of the infrastructure for occupational health and safety.
The Legal Parameters - The basic policy guidelines for occupational safety and health are stated in the
Constitution of India. Accordingly, a number of Acts have been enacted to ensure that all the workers are provided
with a working place which is safe and healthy. However, due to overlapping jurisdiction and lack of uniformity in
approach, the Acts enacted at various points of time and enforced by different agencies have created serious
problems of implementation of theses Acts. Various industrial activities, especially in the unorganized sector do not
have sufficient legislative coverage to protect safety and health of those employed therein.
The concept of occupational health and safety has not been accepted by the industrial workers and managements in
India. Though there are various regulations present, most of these are, however, good on paper only, as neither
workers, nor their representative unions, are fully aware to take advantage of these.
The Compensation Mode - Compensation to an injured worker in the form of cash benefits under the Workmen’s
Compensation Act. Under the Employees’ State Insurance Act also compensation is in the form of cash benefits.
The benefits covered by theses Acts are: Sickness Benefit, Maternity Benefit, Disablement Benefit, Dependents’
Benefit, Funeral Expenses, Rehabilitation Allowance and Standard benefit.
Compared to WCA, the ESI Act is the latest and has a wider coverage and is
more exhaustive. It also provides for more compensation than what a
workman would get under Workmen’s Compensation Act.
OCCUPATIONAL SAFETY AND HEALTH STATUS IN OTHER
COUNTIES.
The developed countries of the West have a better occupational safety and
health infrastructure as compared to India. The institutional mechanism is
much stronger thee with the enforcement agencies having wide-reaching
powers.
Source : Technology Information forecasting and assessment council , GOVT of India
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TAXATION NEWS
CBDT Notifies SAHAJ (ITR-1), ITR-2, SUGAM (ITR-4S), ITR-V FOR A.Y.
2014-15 NOTIFICATION NO. 24/2014, dated : April 1, 2014 [ F.No.
142/2/2014-TPL]
New Income tax return forms were notified by CDBT. Further, an amendment has been
notified in Rule 12 which came into effect from 01st April 2014. The amendment to Rule 12
states :
1. From the A.Y. 2014-15 and onwards, every partnership firm shall be required to file its
return of income in an electronic form.
2. From the A.Y 2014-15 and onwards, every political party (whose income exceeds the
maximum to tax) shall be required to file its return of income in an electronic form
3. From the A.Y. 2014-15 and onwards, every charitable trust shall sent a notice under
section 11(2) of the Act to the Assessing Officer by filing Form 10 if a trust accumulates
ist Income and do not want it to be included in the total income of the previous year.
From 10 is required to filed in an electronic form.
CDBT Directive on Opposing Mergers / Amalgamations / De-Mergers – [
F.NO.279/MISC./M-171/2013-ITJ]
The CBDT has issued a letter dated 11.04.2014 pointing out that in a recent case, a scheme of
amalgamation was designed to seek amalgamation with retrospective effect so as to calim set-off
of losses of the amalgamated company with the profits of the amalgamating company. Through
the department filed an intervention application in the High Court to object to the amalgamation,
the same was dismissed on the ground that the department had no locus standi in the matter. The
CBDT has stated that to avoid this situation again, the procedure prescribed in this behalf vide
‘MCAs Circular No. 1/2014 dated 15.01.2014 for objecting to amalgamations etc which are
prejudicial to the interests of the revenue should be followed.
Extension of anti-dumping duty on “Cold Rolled Flat Products of Stainless Steel “ falling under
the heading 7219 of the First Schedule to the Customs Tariff Act. 1975 (51 of 1975), originating
in, or exported from, the People’s Repiblic of China, Korea RP, European Union, South Africa,
Taiwan (Chinese Taipei), Thailand and United States of America (USA) for a urther period of
one year i.e. upto and inclusive of 21.04.2015 (Notification no. 20/2014-Custom (ADD) dated
12.05.2014)
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EY Tax Alert
Kolkata Tribunal denies capital gains exemption on conversion of a private limited
company into an LLP for violation of exemption condition.
Tax Alert which summarizes a recent ruling of the Kolkata Tribunal (Tribunal) in the case of Aravali Polymers LLP (Taxpayer) on the issue of taxability of gains upon conversion of a private limited company (company) into a Limited Liability Partnership (LLP) which is exempt from capital gains under the provisions of the Indian Tax Laws (ITL) subject to compliance of certain conditions. The Taxpayer, an LLP, was formed on conversion of the company into LLP under Limited Liability Partnership Act, 2008 (LLP Act). Post conversion but in the same year, the Taxpayer gave its partners interest-free loan in the profit sharing ratio partially out of the accumulated profits standing in the accounts of the company on the date of conversion. The Tribunal held that grant of such loan resulted in breach of one of the exemption conditions viz. the condition which requires that no amount is paid, either directly or indirectly, to any partner out of accumulated profit standing in the company’s accounts on the date of conversion for a period of three years from the date of conversion. The Tribunal held that since the violation of condition occurred in the same tax year as that of conversion, the Taxpayer never qualified to secure the exemption. Consequently, the general provision relating to taxation of capital gains was applicable and not the special provision which provides for forfeiture of exemption and taxation of capital gains in the hands of successor LLP in the year of violation.
The Tribunal further held that the capital gains on conversion cannot be computed on the basis of market value of assets transferred but should be computed on the basis of actual value at which assets are
acquired by successor LLP.
The present Tribunal ruling deals with certain important issues arising on conversion of company into LLP. Firstly, the Tribunal appears to have proceeded on the basis that the event of conversion necessarily triggers capital gains taxation upon conversion of company into LLP. The non-chargeability of capital gains was not tested on general principles in this case but on the basis of compliance of conditions
of specific provision for exemption.
Secondly, the Tribunal has concluded that breach of exemption condition in the same year as conversion triggers capital gains under general provision and not under special provision. The Tribunal has not
specifically examined whether such consequences are relevant to predecessor-company.
Thirdly, the Tribunal’s conclusion that the capital gains, if at all, should be computed on the basis of actual transfer value and not on the basis of market value as on date of conversion will be welcomed by the taxpayers. The ruling supports that if the conversion is made at book value, there may be minimal capital
gains implications.
Fourthly, it should be noted that the Tribunal was not concerned with tax implications in the hands of the erstwhile shareholders of predecessor-company who become partners in successor-LLP which may need independent evaluation.
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Asian Pellets and DRI Conference 8 - 9 July 2014
Singapore Mariott Hotel
Singapore, Singapore
Minerals, Metals, Metallurgy & Materials (MMMM) 2014
4-7, September 2014
Pragati Maidan
New Delhi
For Booking & Enquiries
International Trade and Exhibitions India Pvt. Ltd.
1106-1107, Kailash Building, 26 K.G. Marg, New Delhi- 110001, India
Tel: +91 11 40828282
Gagan Sahni: +919810036183
Varun Sharma:+91 11 40828208
Smita Roy: +91 11 40828217
Sandeep Arora: +91 11 40828227
13th International Stainless & Special Steels 2 - 4 September 2014
Hotel InterContinental
Istanbul, Turkey
AMM 8th Steel Scrap Conference 10 - 11 September 2014
Hilton New Orleans Riverside
New Orleans, U.S.A
From 28-30 October 2014, Messe Duesseldorf India with its parent company, Messe Duesseldorf GmbH {organiser of wire and
TUBE Duesseldorf, GIFA,
METEC, THERMPROCESS and NEWCAST (GMTN)} and MESSE ESSEN GmbH (organiser of Schweissen & Schneiden),
will organise 4 leading trade fairs for the metals industry in India. They are Metallurgy India 2014, Wire & Cable India 2014,
Tube India International 2014 and INDIA ESSEN WELDING & CUTTING 2014 in halls 1, 5 and 6 at the Bombay Convention & Exhibition Center, Goregaon (East), Mumbai.
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STEEL NEWS
Mining Engineers Association seek amendment of Indian mining Act
(Follow @steelguru on Twitter for important updates)
Business Line reported that the Mining Engineers Association of India, a national body with 5,000 engineers, fears there would
be large scale closure of mines across the country in the wake of the Supreme Court judgment in the Goa mining case.
The association has appealed to the Government to amend the Mines and Minerals Act to revive the mining sector.
A Bagchhi, President of the association said that “The apex court judgment brought out a serious anomaly in the Mineral
Concessions Rules and the Mineral Conservation and Development Rules 1988 vis-à-vis the MMDR Act, which makes
operations of several mines in India questionable and against the spirit of the judgment. Unless this inconsistency is removed, the
ban in Goa is bound to spread nationwide to other States.”
He pointed out that “Goa had 118 iron ore mining leases working till suspension of mining in October 2012. During 2011-12,
mines in Goa had produced about 24 million tonnes of iron ore, with the total revenue generated from the ore export being 21,818
crore.” The Supreme Court judgment in the Goa case in April and its interim order in the Odisha case in May held that mines
operating in the 2 States under deemed extension beyond first renewal was illegal.
Source - Business Line
Get latest updates through Twitter – Follow @steelguru
(www.steelguru.com)
Odisha iron ore output in 2013-14 up 22pct at 78 million tonne
(Follow @steelguru on Twitter for important updates)
Business Standard reported that iron ore production in Odisha rose 22% in 2013-14 to reach 77.84 million tonne compared to 63
million tonne in FY 2013. The state's iron ore output is also the best since 2009-10 when the ore production touched its highest
ever level of 79.67 million tonne but plummeted in the subsequent years.
Mr Prafulla Kumar Mallick steel & mines minister of Odisha said that “Exports of the bulk ore from Odisha doubled from 4.34
million tonne in FY 13 to 8.81 million tonne. The state's internal consumption of iron ore stood at 67.66 million tonne.”
Major iron ore producers during 2013-14 included
1. Serajuddin & Company
2. Sarda Mines (7.02 million tonne)
3. Rungta Mines (5.4 million tonne)
4. Indrani Patnaik (3.88 million tonne)
5. Essel Mining & Industries Limited (2.7 million tonne)
6. Mid-East Integrated Steel (2.07 million tonne)
7. Aryan Mining & Trading Corporation (2.9 million tonne)
8. Rungta Sons (2.63 million tonne)
9. Feegrade & Company Private Limited (2.11 million tonne)
Apart from iron ore, Odisha produced 663,708 tonne of manganese ore, 7.63 million tonne of bauxite, 109.6 million tonne of
coal, 3.71 million tonne of limestone and 2.85 million tonne of chromite ore. The state's mining revenue slowed 3.11% to INR
5,515 crore in FY 14 compared to INR 5,695.70 crore in 2012 to 2013.
Source – Business Standard
Get latest updates through Twitter – Follow @steelguru
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ASSOCHAM calls for imposition of 30% export tax on iron ore pellets
(Follow @steelguru on Twitter for important updates)
Apex industry body ASSOCHAM called on Ms Nirmala Sitharaman Minister for Commerce and Industry of India and submitted
a memorandum while strongly suggesting the new regime to impose 30% export duty on iron ore pellets in interest of the
domestic steel industry.
The senior ASSOCHAM Managing Committee member, Mr Ravi Wig who led the chamber’s delegation said that “As the export
of iron ore pellets rose to a whopping 1.5 million tonne in fiscal year (FY) 2013 to 2014 as against nil in FY 2012 to 2013, we
have urged the Center for levying export duty on iron ore pellets as in the case of iron ore fines and lumps in order to ensure iron
ore security to India’s steel industry.”
The Associated Chambers of Commerce and Industry of India in a communication addressed to Commerce and Industry
Minister, highlighted that “Presently, iron ore pellet attracts zero duty while the duty on iron ore export is 30%, therefore
exporters are circumventing iron ore pellets’ exports by paying only 5% export duty.”
Iron ore production in India has fallen significantly during the course of past few years i.e. from a level of 218 MT in 2009 to
2010 to only 144 MT in 2013 to 2014 which is further expected to drop to 100 MT in FY 2014 to 2015 against the demand of
140 MT. The drop in iron ore production is due to reduced or no production of iron ore from states like Goa, Karnataka and
Odisha after the ban imposed by the Supreme Court.
As such, ASSOCHAM has suggested the Government to maintain 30% duty on export of iron ore till the time iron ore shortage
situation in India normalises.
At a meeting convened by the Commerce Ministry last week (June 5, 2014), ASSOCHAM had also suggested the government to
reduce the import duty on iron ore to zero from the currently levied 2.5%. This shall help rectify this anomaly in the duty
structure and safeguard the competitiveness of domestic steel industry.
Mr DS Rawat secretary general of ASSOCHAM said that “Exports of iron ore pellets is not only draining India’s mineral wealth
but is also causing significant revenue loss to the country as pellets attract only five % export duty whereas it is 30 % in case of
iron ore exports.”
Mr Rawat said that “It is both surprising and unfortunate to note that despite severe iron ore shortage, India exported 14 MT iron
ore in the last fiscal, mainly in the form of pellets. Besides, value addition in case of pellets is merely 20% as against 500% in
case of steel. Therefore, export of steel is a better value proposition for India as it not just adds extra value to the raw material but
creates new employment avenues and generates revenue.”
Quashing the recent reports about 120 MT approx. iron ore stocks being available in India in different states, ASSOCHAM
termed it as a myth and misrepresentation of facts. “Even the iron ore prices in India have escalated by 20 to 25% while globally
prices have decreased by up to 30% since April 2013.
Due to unavailability of iron ore, there has been a sharp decline in steel capacity utilization which declined to 77% in FY 2013 to
2014 from 88% in 2010 to 2011, moreover, India imported 5.7 MT steel in FY 2013 to 2014 to fulfill the domestic requirement.
There is a strict need to conserve this exhaustible natural resource which is available in limited quantity instead of exporting it to
achieve the target of 300 MT crude steel capacity by 2025 set by the high level working group.
Source – Strategic Research Institute, Steel Guru
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Modi Magic - Fails to boost Indian 4 wheeler sales in May (Follow @steelguru on Twitter for important updates) Society of Indian Automobile Manufacturers announced that Indian auto industry produced a total 1,990,010 vehicles including passenger vehicles, commercial vehicles, three wheelers and two wheelers in May 2014 as against 1,742,939 in May 2013, registering a growth of 14.18% over the same month last year. The sales of Passenger Vehicles declined by (-) 3.46% in April-May 2014 over the same period last year. Within the Passenger Vehicles segment, Passenger Cars and Vans declined by (-) 3.68% and 16.36% respectively, while Utility Vehicles grew by 2.46% in April-May 2014 over the same period last year. The overall Commercial Vehicles segment registered a de-growth of (-) 19.69% in April-May 2014 as compared to same period last year. Medium & Heavy Commercial Vehicles (M&HCVs) registered negative growth at (-) 13.81% and Light Commercial Vehicles also dropped by (-) 22.59%. Three Wheelers sales grew by 5.29% in April-May 2014 over the same period last year. Passenger Carriers and Goods Carriers grew by 6.08% and 2.21% respectively in April-May 2014 over April-May 2013. Two Wheelers sales registered growth of 14.03% in April-May 2014 over April-May 2013. Within the Two Wheelers segment, Scooters, Motorcycles and Mopeds grew by 30.32%, 9.93% and 1.60% respectively in April-May 2014 over April-May 2013. In April-May 2014, overall automobile exports grew by 22.23%. Passenger Vehicles, Commercial Vehicles and Two Wheelers grew by 0.87%, 20.80% and 33.89% respectively, while exports of Three Wheelers declined by (-) 5.38% in April-May 2014 over April-May 2013. Source - Strategic Research Institute, Steel Guru Get latest updates through Twitter - Follow @steelguru (www.automobileguru.in)
Indian Iron Ore Mining Mess - CBI steps up probe in Seemandhra, Karnataka and Goa
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Business Standard reported that the CBI and the Enforcement Directorate have stepped up their investigation into the multi
billion dollar illegal mining scandal which spans across Seemandhra, Karnataka and Goa.
The Central Bureau of Investigation probing the mining scam in Seemandhra and Karnataka has informed the Goa government
that large quantities of iron ore from the two states were exported from the western state and this requires investigation.
Mr S Arunachalam CBI Joint Director has in a letter formally intimated the Goa government that the agency is starting the probe
into the Goa end of the scam in Seemandhra and Karnataka. Mr Arunachalam said that the agency would now probe the
involvement of the Panaji and the Mormugao ports in Goa and the role of officials and mine operators in transporting the ore
illegally mined from here.
The federal agency is already unraveling how illegal ore from then Andhra Pradesh and Karnataka was exported from ports like
Karwar, New Mangalore, Krishnapatnam Kakinada, Vishakhapatnam Ennore and Chennai.
Source - Business Standard
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Growth in India’s April steel output ahead of global avg
New Delhi, May 22: India’s steel production grew by 5.3% in April, outpacing the world’s average growth of 1.7%,
World Steel Association (WSA) said. India produced 7.015 million tonne steel in April, compared to 6.659 million
tonne in the same month last year. Cumulative production grew 2.5% in the first four months of this year to 27.766
million tonne the year-ago period, WSA data showed. Global steel output stood at 136.62 million tonne in April
compared to 134.346 million tonne in the same month last year 68.8 million tonne. Chinese production grew 2.1%
over the same month last year. Japan produced 8.9 million tonne in April, a decrease of 2.5% over April 2013 South
Korea produced 6.1 million tonne.
Among the European Union nations, Germany produced 3.7 million tonne, Italy 2 million tonne, France 1.4 million
tonne, Spain 1.2 million tonne and Turkey 2.6 million tonne. Russia produced 5.8 million tonne, an increase of
0.7% over the same month last year. Ukraine’s production was 3.6 million tonne. Recording a dip of 1.6% the US
produced 7 million tonne. Brazil’s production also fell by 5.1% to 2.8 million tonne. The crude steel capacity
utilization ratio in April was 78.7%, “ WSA said
Iron ore production headed for all-time low The supreme Court’s move to restrict the operations of 26 mines in Odisha, albeit for a short period will hit India’s overall iron
ore production and exports this financial year. Until the Odisha Government renews the lease of these 26 mines domestic iron
ore production will fail by an all-time low of 115 mt. Major miners, including Tata Steel, SAIL, BICO and Odisha Mining
Corporation, will record lower production. At the beginning of 2014-15, domestic Iron ore production for the this financial year
was estimated at 155 mt. In 2013-14 and 2012-13, production stood at 136 mt each
With 26 mining leases going out production, the actual production for this year in Odisha could fall to 32 mt of this three mt will
be from captive mines. The rest is inadequate to meet the requirements of steel mills. This means there will be very little scope
left for exports from Odisha this year.” Said Prakash Duvvuri, head of research, oneTeam Research, Delhi-based research firm.
In 2013-14, Odisha produced 72 mt. of iron ore, of which 15 mt were from captive mines. This financial year, production is
expected to decline to 29 mt Duvvuri said this year, exports could stand at 20-22 mt, provided Goan miners were able to export
about 15 mt to China. Last financial year, Odisha was the largest contributor to India’s iron ore exports. This year, excluding the
26 mines banned from mining, the rest could contribute five-six mt.
Consumption of Steel up merely 0.5% in April-May
New Delhi : India’s steel consumption grew a marginal 10.5% in the first two months of the current fiscal to 12.623 million
tonne (mt) over the same period last year. According to the Joint Plant Committee (JPC), Unit of the Steel ministry. India had
consumed 12.563 mt steel in April-May of FY14. “Consumption in April and May is less because government spending on
infrastructure has been low in these two months. In addition, end-use industries are also consuming less steel. A senior official at
a private steelmaker said.
Government infrastructure spending is a major source of demand for steel and it was understandably less due to general. The
official said. The construction sector accounts for around 60% of the country’s total demand while the automobile industry
consumes 15%. In FT14 steel consumption in India grew by just 0.6%, the lowest in four years to 73.93 Mt over the previous
fiscal. Meanwhile, domestic production of finished steel during the April-May of the current fiscal grew to 14.99 mt registering
1.9% growth over April-May 2013.
Major firms such as SAIL , RINL, Tata Steel, Essar, JSW and JSPL, produced 7.54 mt and the rest came from other producers.
Exports were up 21.2% in April-May this year at 0.982 mt. Outwards shipments in May stood at 0.53 mt. Imports grew 18.2% to
1.06 mt JPC said. ( The Financial Express, New Delhi 07.06.2014)