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Steel ministry subsidy scheme for iron ore processing

West Bengal,Business/Economy, Mon, 26 Mar 2012 IANS

Kolkata, March 26 (IANS) The steel ministry would soon come out with an interest rate subsidy scheme for iron ore processing and introducing energy-efficient systems in secondary steel plants.


"Both the plans for offering interest rate subsidy for iron ore processing and introducing energy efficient systems in secondary steel plants have received in-principle approval from the Planning Commission," A.C.R. Das, advisor (industrial) in the ministry, told reporters here Monday.


"Now, we are going to begin the process to formulate the details of the schemes," Das said on the sidelines of Indian Iron Ore Pellets Conference 2012.


"Once the schemes are ready these would be sent again for the plan panel's approval," he added.


The ministry is in favour of a five percent interest rate subsidy for both the plans.


The country's capacity to produce iron ore is targeted to grow from the present 35 million to 80 million tonnes by 2015. Most of that would be used for captive consumption.


Crude steel capacity is projected to reach 110 million to 150 million tonnes per annum by 2020. It would require 250 million tonnes of iron ore to achieve the target.


The central government has shown its intent to incentivise pelletisation processes for the benefit of the steel industry. It increased iron ore export tax to 30 percent in December 2011 to ensure availability of wider range of iron ore fines into the domestic market, which can be profitably used by the domestic steel making companies.


Also, iron ore pellets have been fully exempted from export duty to encourage the value addition process for fines.


In the union budget for the year 2012-13, the government has proposed reduction in customs duty on iron ore equipment from 7.5 percent to 2.5 percent. This is likely to spur India participants to go for pelletisation of iron ore fines in a big way.


The day-long conference was organised by Ore Team, a sectoral research group, in association with a host of organisations, including the ministry's Economic Research Unit, the Sponge Iron Manufacturers Association (SIMA) and the National Mineral Development Corporation (NMDC).


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