Gas shortage affecting viability of steel plants

The curtailment of natural gas supply to gas-based steel and sponge iron plants is forcing them to rely on costlier imported natural gas, which has adversely affected financial viability of these units. This may also have an adverse impact on investment in downstream steel industry, a government panel has reported.

A task force appointed to look into the raw material position for the steel sector, as a part of the formulation of a 'new national steel policy', has suggested this in its draft report, minister of steel Beni Prasad Verma informed the Lok Sabha in a written reply.

He said the ministry of steel has brought the issue of curtailment in supply of natural gas to the existing gas-based steel/ sponge iron plants to the notice of the ministry of petroleum and natural gas and has sought steps for continued supply of requisite gas to the gas-based steel/ sponge iron sector in the interest of overall economic development of the country.

The government, meanwhile, has constituted an empowered group of ministers (EGoM) on pricing and commercial utilisation of gas under the New Exploration Licensing Policy (NELP) that would, among other issues, decide on allocation of NELP gas to different sectors.

The meeting, held on 24 February 2012, had taken note of the demand of natural gas for the steel sector, he said.

Underground mining in Western Ghats suggested
The task force has also suggested underground mining in the ecologically sensitive Western Ghats as is done by the 1,500 m deep and 4,000 m long Kiruna Mines in Sweden, which boasts of the largest and most modern underground iron ore mine in the world.