Steel ministry tells state govts to jack up scrap steel capacity

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Published: November 15, 2019 12:53:53 AM

India had been paying as much as Rs. 24,500 crore to import its 7-million tonne deficit, as in 2017-2018, of scrap steel, despite the fact that country has a huge unorganised pool of unprofessionally-run scrap processing outfits far and wide.

The idea is ensure quality scrap for steel industry that would minimise the need for expensive imports. (Image credit: Shutterstock)

On the heels of rolling out the scrap steel policy last week, Union ministry of steel will go all out to work in tandem with state governments to create steel clusters in micro, small and medium enterprises (MSME) sector. The idea is ensure quality scrap for steel industry that would minimise the need for expensive imports.

“Ministry has sent an initial communique to all state governments on converting the unorganised scrap business into organised clusters in private sector for utilising downstream steel. This is a guideline, not mandatory. If state governments could initiate at least one steel cluster, with scrap collection centres and processing machinery, it could generate the much-needed jobs, besides contributing quality scrap steel for the domestic steel industry. We intend to have continued engagement with state governments on this capacity-building exercise,” Binoy Kumar, Union secretary for steel, told FE.

He was speaking at the sidelines of the International symposium on Advanced Materials for Industrial and Societal Applications (Amisa) by Indian Institute of Metals at Kovalam on Thursday.

Currently, the state governments have different criteria to categorise the treatment of hazardous and other environmental waste. While some states dub certain items as “red”, the other states could have it under the “orange” category. This anomaly would end as the Centre would soon have a single uniform category in place to mark their environmental pollution value, said Kumar.

India had been paying as much as Rs. 24,500 crore to import its 7-million tonne deficit, as in 2017-2018, of scrap steel, despite the fact that country has a huge unorganised pool of unprofessionally-run scrap processing outfits far and wide.

Electric furnaces will be able to deliver high-grade steel from quality steel scrap, enhancing local production. Secondly, the proposed state-level initiatives of forming clusters to mobilise and utilise the scrap steel would also create jobs. Ministry estimates at least 70 scrap steel processing units of one lakh tonne capacity each would be necessary. This could create at least three lakh jobs countrywide.

After an “unhappy phase” in the construction industry, the country’s steel consumption has started picking up, said Union steel secretary. Construction segment accounts for 43% of steel consumption. “Government’s investment in infrastructure spending has started showing results. Festival season has also brought about revival of the sentiments,” he said.

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