Mumbai, Oct. 26: Brushing aside the impending competition in the steel sector, Tata Steel managing director B. Muthuraman today said only serious and experienced players should get iron ore ? the crucial raw material for making steel.

Muthuraman hoped that that the ore is not frittered away by fragmenting the resources among several players. “There will always be competition for iron ore. Competition is good and we face it in every sphere of our lives,” he said.

His statement comes at a time when South Korea’s Posco and Lakshmi Mittal’s Mittal Steel have lined up ambitious projects to manufacture steel in the country.

India has proven reserves of 18-20 billion tonnes of iron ore. With a conversion ratio of 1.6-2 tonnes of ore for every tonne of steel, there are enough reserves in the country, he said.

By 2015, going by the MoUs being signed by different groups with state governments, the capacity could snowball to 300 million tonnes of annual steel production. Some analysts view this as a highly optimistic figure. However, if this figure is taken seriously, it will result in a person using 200 kg of steel annually in India, which is the current level of consumption in China.

There is a link between the GDP growth rate and steel use. According to Muthuraman, it can grow faster.

He, however, pointed out that it is the responsibility of the industry to put in place the infrastructure for a township, roads and ports. If Jamsetjee Tata, the founder of the Tata group, had waited for infrastructure to be put up before building a steel plant in Jamshedpur, it (Tata Steel) would not be there, he added.

Meanwhile, Tata Steel has reported a 12.4 per cent increase in net profit at Rs 1045 crore in the second quarter compared with Rs 929.58 crore last year on the back of higher volumes that offset the softening of prices.

Sales touched Rs 4395.08 crore on September 30, 2005 against Rs 4107 crore in the year-ago period.

“Prices have been softening. But we have made up through better product mix, higher production and stricter cost control,” Muthuraman said. “Profits in the industry are not only determined by prices. Costs, product mix, volumes and price are the four levers to determine profits for a steel company,” he said.