Malthusians in steel industry

New Delhi : Many have the tendency to loosely use the word ‘vision’ while talking about an industrialist or a business house. This, however, is a rare attribute, seen in abundance a century ago among the promoters of Tata Steel. Fortunately for the company, this quality has not deserted the successors, as abundant ownership of steel- making minerals from iron to coal to manganese ores will bear it out. The desire to sit at the high table of world steel makers saw Tata Steel buying Corus, nearly four times bigger than itself, in 2007. Group chairman Ratan Tata was quick to decide that investments in iron ore, coking coal mines and signing of supply contracts with mining companies were the need of the hour for Corus which unlike the Jamshedpur plant lacked ownership of resources.

The world’s largest steel maker, ArcelorMittal, was not, however, early off the blocks in resources acquisition. It is making good for the lost time, as its success in stepping up production of iron ore and coal in recent years and spinning off the activity in a separate mining division will show. Like Tata Steel seeking to build capacity in Jharkhand and Chhattisgarh has made it conditional on winning access to iron ore deposits, ArcelorMittal’s two mega steel projects here will depend on its getting adequate mines linkages. To talk of vision, Tata Steel managers obviously believed even when minerals were available cheap that a day would come when mining groups could be whacking user industries like steel with a shovel.