India is considering a plan to hand over control of iron ore and coking coal mining to the steel ministry to boost supplies of the key steelmaking materials as the country is poised to become the world’s second-biggest producer, according to a person with knowledge of the plan.
The proposal to shift the regulatory authority from the current mines and coal ministries is under discussion and needs approval from the prime minister’s office and the ministries, said the person, who asked not to be identified as the matter is not yet public. The integration would allow the steel ministry to make better trade policies, speed up approval of mining licenses and make it easier for foreign steelmakers to set up operations in India, the person said.
India’s steel and mining industries have been at loggerheads over iron ore exports. While miners have sought lower export taxes to become more competitive globally, steelmakers have argued for conserving the material for domestic use and focus on exports of value-added products rolled out of their mills.
The steel ministry has been trying to formulate a policy on iron ore pricing for more than a year as it seeks to protect the industry from volatility. The plan to shift control of the sectors would enable the ministry to finalize its plan sooner, the person said.
Spokespeople from the prime minister’s office and the coal and steel ministries didn’t respond to calls. Mines secretary Arun Kumar wasn’t available.
India’s steel output is expected to rise to 108 million metric tons this year, topping Japan’s 107 million. “If it happens, it will surely be helpful for the steel companies,” said Goutam Chakraborty, a Mumbai-based analyst at Emkay Global Financial Services. “JSW Steel being a non-integrated producer, will benefit most assuming better accessibility to iron ore.”
Shares of the top steel mill JSW Steel Ltd. rose as much as 1.2 percent in Mumbai on Friday, reversing earlier losses of 2.4 percent. Tata Steel Ltd. rallied as much as 1.4 percent, and Steel Authority of India Ltd. climbed as much as 2 percent.
Source: BloombergPrevious Next