People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 48

December 02, 2007

Ensure Iron Ore Security For Vizag Steel Plant

Adopt National Mineral Policy


Ardhendu Dakshi


CITU affiliated Steel Plant Employees Union (SPEU) organised a seminar in Visakhapatnam on the October 29, 2007. It discussed two major issues, one related to ensuring captive iron ore linkage to Vizag Steel Plant for its needs as at present or in future, after the massive expansion project is complete, the other one was demanding ban on export of iron ore from the country. This is to ensure enough reserves sufficient to meet the total requirement of the country as steel production is going to be expanded dramatically in next two decades.


Senior leaders like MK Pandhe, Basudeb Acharia, M Babu Rao and a host of eminent technologists, experts and engineers spoke in the seminar along with A Dakshi, Ajay Sarma, V Dhanaraju and N Rama Rao.


The approach paper gave a detailed account about how the Vizag Steel Plant (VSP) has been put to a great disadvantage and financial strain because it has so far been denied mining lease of iron ore for its own consumption even after its repeated appeals for more than a decade. SAIL, TISCO, IISCO (since beginning in 1920) have their captive iron ore mines. In recent times, POSCO, the Korean private steel company has been allotted captive iron ore mines with a special permission to export 30 percent of iron ore raised. But Vizag Steel Plant is the only plant in public sector that has been refused grant of mining lease for its home consumption. The approach paper decries this as a discriminatory treatment to VSP.


The approach paper also underlined the urgent need to impose a ban on export of Haematite variety of iron ore which is used in Indian steel plants. Ours is the best quality iron ore available in the world and therefore is in great demand. At present about 100 million tons of ore is exported while domestic use is only about 55-60 million tons as our steel production is 42-45 million tons. Government of India has declared a National Steel Policy which targets 120 million tons of steel by 2025. International Iron and Steel Institute has predicted that steel production in India can go up to 180 million tons by the year 2030-2035 and become the second biggest steel producer in the world after China. The paper says that if exports are allowed to continue then our domestic reserves will be exhausted in 35-40 years, and India will have to import iron ore form abroad at a high cost.


MK Pandhe supported the submissions made in the approach paper and demanded that the Vizag Steel Plant must be granted an Iron Ore linkage without delay so that it can improve its performance and profitability. He observed that VSP has proved to be a national asset and with its outstanding performance it should be allowed to contribute to the national economy in a greater way. He compared that a power plant can perform best if it has a captive coal mine, similarly a steel plant should have a captive iron ore deposit. Denial by government of India and state governments to grant lease of mining to VSP in discrimination he said.


Pandhe also mentioned that there should be a national mineral policy in place to guide utilisation of minerals and other raw materials in a manner that would serve the best interests of the country as well as to ensure use of the national wealth by the states as they desire. He emphasised that iron ore, coal, water or Bauxite or any other important raw material cannot be the property of a state and any condition to utilise the natural wealth only in the state is not a proper attitude, though all the states particularly the backward states have all the rights to develop their own state.


Pandhe reiterated that National Mineral Policy should also decide on export of exhaustible raw materials like iron ore. China has banned it, Brazil has restricted export of iron ore and such steps are being taken in national interest. As India is going to be a big Steel producer in future, our iron ore reserves should not be exported as that will lead to a serious crisis of shortage in future. He suggested that after the seminar there should be a programme to meet the MPs, ministers, chairman COPU to impress upon them the problems of Vizag Steel Plant and the problems arising out of export of iron ore.


Pandhe made an appeal to all the unions like INTUC, AITUC, HMS and local unions to move jointly and also to win the support of executives and build up a strong movement in support of Vizag Steel Plant. He asserted that trade unions are for the country’s advancement and development of our industries. He cited the case of IISCO where all the unions and officers association were totally united and IISCO could be saved. His call for all round unity was applauded by all the participants of the seminar.


Basudeb Acharia expressed his total support and commitment to Vizag Steel Plant and compared that while POSCO has the permission to mine and export iron ore in excess of what it needs for its new plant in Orissa, Vizag Steel Plant has been denied a captive iron ore mines for its home consumption only. Again POSCO has the right to mining even before the Steel plant is constructed. He supported the call for permission and free movement of iron ore all over the country to facilitate development. He mentioned that in the western districts of West Bengal several steel plants have been proposed and their success lies heavily on supply of iron ore or grant of mining lease in adjacent states. He observed that such growth and development should be encouraged in a spirit of mutual support and co-operation between the states. A national mineral policy should be evolved on the basis of this foundation. Acharia declared that he would fight in the parliament so that justice is done to Vizag Steel Plant and export of iron ore is banned forthwith to conserve this non-renewable national wealth for our future development. Basudeb Acharia strongly advocated that instead of exporting iron ore there must be every effort to set up steel plants in the country as that would generate employment to our young people, engineers, technologists and naturally economy will flourish and many more jobs will be created in service sector. That should be our top priority for the country.


M Babu Rao expressed his full support for this plant and the demand for grant of mining lease for its survival after massive expansion of up to 10 million tons per year. Vizag Steel Plant is the pride of Andhra and the best steel plant in the country which got prime minister’s trophy. In no way should its interests be undermined. He asserted that trade unions are now fighting for national interest. The workers and their unions are now taking active interest and taking principled positions on the matters like Indo-US nuclear deal and joint naval exercise and all such matters.


A Dakshi explained the precarious iron ore reserves and supply positions in the country. In recent past, 180 MOUs have been signed by several parties in addition to massive expansion schemes being pursued by SAIL and RINL and all the producers are asking for iron ore linkage. Most of the expansion programmes cannot take off unless Hematite iron ore export is stopped and domestic producers are assured of steady iron ore supply and big projects are allowed mining lease to fructify massive investment. Dakshi also mentioned that Vizag Steel Plant has to bear an additional expenditure of Rs.1000 crore on account of purchasing iron ore from open market. A public sector steel plant deserves a better treatment from the government. Granting mining lease is not any favour to VSP but just a right to exploit the resources on their own. Ajay Sarma reminded the workers and people from all other sections of the society to forge unity and wage a big struggle in the interest of the Vizag steel plant in particular and of the people of the state of Andhra Pradesh in general.


N Dhanaraju, N Ramrao also spoke and exhorted everybody to take up the issues and programmes seriously.


All the speakers thanked the Steel Plant Trade Union (CITU) for organising this seminar and taking up the most important problem the plant is facing and for uniting all the workers organisations and technologists for a grater cause that will ensure the survival of Vizag Steel Plant.