Jindal: Fresh start

Calcutta, Sept. 21: JSW Steel has revived its proposal to set up an integrated steel plant in Bengal and this time it has sweetened its earlier offer by proposing a power plant too.

After meeting chief minister Buddhadeb Bhattacharjee at Writers’ Buildings today, JSW Steel chairman Sajjan Jindal announced that a new company, which will partner state agency WBIDC, will be formed next month.

The Jindals had backed out of the Bengal project last year when the Jharkhand government refused captive iron ore mines for a steel plant in Bengal.

Though the Jharkhand government’s stand has not changed in the last one year (there’s little possibility that the new government in the state will think differently), Jindal is hopeful that a policy change at the Centre on export of iron ore will bail him out this time.

Last year, the onus was on Bhattacharjee to coax his counterpart in Jharkhand, Arjun Munda, to allow movement of ore to Bengal. This year, Jindal sought Bhattacharjee’s assistance to ban ore export from the country altogether. “I requested him (Buddhababu) to take this up with the Prime Minister,” Jindal said.

He said the Rs 10,000-crore project that may come up in Guptamani need not require captive mines at all. He has asked for 5,000 acres of land for the project.

“If export is banned, there will be no issue between states. There will be enough ore,” he added.

The Prime Minister’s Office had set up a committee of secretaries to look into the demand of steel companies to stop export. Bhattacharjee had also written to the Prime Minister on this issue. His demand was echoed by Tata group chairman Ratan Tata.

India exports 90 million tonnes of ore to mostly China and Japan. Steel industry experts say there will be idle mining capacity within the country if export is banned. Miners either have to stop production or sell to buyers like Jindal. States will also have to allow movement to other states fearing job loss if mines close down. Moreover, a clampdown on export (as China has done on many mineral products) will soften prices.

Today, companies like JSW Steel harp on captive mines as it gives a tremendous price advantage. While landed price of ore comes to Rs 4,500 a tonne, the same can be procured at Rs 500 if one has captive mines.

The power plant, for which the Jindals will need coal blocks, will cost Rs 4,000 crore. Jindal said the plant would come up in Birbhum.

Land and land reforms minister Abdur Rezzak Molla welcomed Jindal’s proposal for the power plant in Birbhum. “If they propose to set up shop in the laterite zone, we’ll be very pleased. We badly want investment in infertile areas,” said Molla.