NOVEMBER 20248STEEL SHORTAGE TO HAMPER INDIA'S ENERGY INDEPENDENCE GOALSHINDUSTAN ZINC TARGETS 1.8 MILLION TONNES PRODUCTION BY 2027Hindustan Zinc, a company owned by Vedanta Limited, aims to achieve a production capacity of 1.2 million tonnes (MT) by 2025, increasing to 1.35 MT in 2026 India's power sector is facing a significant 30 percent shortage of Cold-Rolled Grain-Oriented (CRGO) steel, a crucial material for transformers and electric motors, according to the Global Trade Research Initiative (GTRI). CRGO steel's grain orientation helps reduce energy losses in transformer cores, making it indispensable for efficient power distribution. However, domestic production currently meets only about 10-12 percent of the total demand, compelling India to rely on imports from countries like Japan, South Korea, China, and Russia.The shortage has been exacerbated by delayed license renewals from the Bureau of Indian Standards (BIS), which certifies foreign suppliers under a Quality Control Order. Many of these licenses are nearing expiration, causing supply uncertainty and limiting import options to approved vendors and grades.Ajay Srivastava, founder of GTRI, emphasized the need for independent auditing of the BIS process to address delays. He also highlighted the importance of prioritizing local CRGO production as a strategic goal to secure India's energy future. In FY 2024, India's demand for CRGO steel reached 400,000 tonnes, with domestic production at only 50,000 tonnes and imports filling much of the gap. and 1.8 MT in 2027. The company's CEO, Arun Misra, stated that the company intends to invest a maximum of USD 2 billion (approximately Rs 17,000 crore) to increase its production capacity to 2 million tonnes in the coming years.Misra stated that the company, which had already hired consultants to increase its capacity, is seeking mining partners."We have a plan of doubling the production to 2 million tonnes. So, I am sure by the end of this quarter, we should be able to make project announcements, which projects, how much and where it is happening." he explained."And then finally, sometime, we should be able to get 2 million tonnes," he explained.When asked about the investment the company plans to make to increase production capacity, he said, "Because most of the mining infrastructure is in place, so, it is anywhere between 2 billion dollars or 1.95 or 2 billion dollars, roughly about, say, Rs 14,000 crore to Rs 17,000 crore is the kind of money that will be required."Regarding the company's restructuring plans, he mentioned that the talks are ongoing and the stakeholders are communicating regularly. He added that since the government is also focusing on disinvesting in Hindustan Zinc, there is a reliance on that too. TOP STORIES
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