India may not be able to add more than half its target of 100 million tonne of steel capacity by 2020 as the world faces a raw materials shortage and India has problems with land acquisition, according to the Posco Research Institute, a unit of South Korean steel major Posco.
India?s aim is to have an installed capacity of 130million tonne by 2020 against 53million tonne at present, with demand expected to be 150m illiontonne by then. But, Chang- ho Kwang, director of POSRI, said there would be a lack of raw materials?especially coking coal?worldwide and India?s physical and social infrastructure poses another problem.
Kwang said the top ten global companies control over the 73% of the raw materials and their expansion would worsen the scarcity faced by smaller players.
Posco, itself among the ten global steel majors, is ramping up its capacity from 34m tonne to 50m tonne, and its 12m tonne India project is important in this respect.
Two years after signing a pact with the Orissa government, Posco is yet to get its mining lease and has managed to acquire only 300 of the 4000 acres it needs for the project, which was the single largest foreign direct investment in India.
But Posco will not pull out of the India project, Kwang said. ?For a player like Posco, such delays have been a bad experience but we are not considering to withdraw our project from India,? Kwang said.
The India project, he said, is strategically important, as India would be the second largest consumer of steel after China within a few years.
At present 70% of the global demand is from China. The 8.6% production growth has been matching the present global demand. Global steel production has gone up from 1 billion tonne in 2004 to 1.3 billion tonne in 2007, Kwang said.