India will become 2nd largest steel maker by 2012: Virbhadra Singh

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"I have set a target of 124 million tonnes by 2012. Yes, we will become the world's second largest steel producer. But more importantly, India has a vast capacity to consume that kind of output. It is necessary for our infrastructure development," the minister said.

"Here, I am only talking about the capacity expansion of existing steel companies. If I also take greenfield projects into account, we have expression of interest for projects worth over USD 80 billion," Singh told IANS in an interview.

At present China is the largest steel maker in the world with a capacity of over 600 million tonnes, followed by Japan and South Korea. India ranks fourth.

A five-term chief minister of Himachal Pradesh, the veteran Congress party leader said the state-run Steel Authority of India (SAIL) alone has targeted to virtually double its capacity to nearly 30 million tonnes.

"These expansion projects will sail through. Both at Bokharo and Bhilai, the company has enough land to take up the projects," said Singh, an alumnus of Bishop Cotton School in Shimla and St. Stephens College in the national capital.

The soft-spoken minister said that the state-run steel company will also go for a public issue and partial divestment of equity during the early part of next fiscal and that a decision has already been taken in this regard.

"We have plans for 10 percent offer. Half of that will be in the form of government's own equity will will go back to the government. The other half will be in the form of fresh equity offer and this will go to SAIL," the minister explained.

"We have a target of Rs.16,000 crore, of which 50 percent will go to the exchequer."

The veteran minister said another company under his ministry's administrative control -- National Mineral Development Corp (NMDC) -- will also go for divestment quite soon and 8.3 percent shares will be on offer.

"We propose to raise Rs.13,000 crore from this NMDC equity sale. But all of it will go to the government," he said, adding there were 11 public sector undertakings within the administrative control of the steel ministry.

Singh said he was keen that some large projects of global companies also go on stream soon, including the USD 12 billion integrated steel unit of South Korea's Posco in Orissa and two similar ones of Arcelor-Mital in Orissa and Chattisgarh.

"There are some genuine issues - the acquisition of land, and that, too, tribal land, allocation of mines and rehabilitation of people. But these are being sorted out. The companies have my assurance that Government of India will be an active facilitator."

--IANS