By Jayant Mundhra

Over 150 million metric tons of steel produced annually, generating a revenue that touches nearly Rs. 5 lakh crore (~$60 billion USD) and contributing almost 2% to India’s GDP.

India is the world’s second-largest steel producer, and this industry is a key catalyst of India’s economic renaissance.

And powering the same is a massive supply chain of coal, coking coal, and iron ore mining industry.

Put together, this economy punches high, with tens of lakhs of jobs and more.

India’s tryst with steel dates back to antiquity

Archaeological evidence suggests that India’s tryst with iron and steel dates back over 2,500 years to the Mauryan Empire when the subcontinent was already a centre for iron smelting and weaponry production.

Ancient Indian metallurgists created some of the finest steel known to the world, including the famous Wootz steel, which later travelled to Damascus to be forged into the legendary swords that bore the name of the city.

During the Mughal era, the industry further expanded, meeting the demands for weaponry, tools, and architectural marvels. And then the British came in and established Bengal Iron Works in 1870.

Soon after, India saw the establishment of Tata Iron and Steel Company (TISCO) in 1907, laying the groundwork for modern steelmaking in Jamshedpur.

This has since evolved into what we know today as Tata Steel!

Post-Independence Acceleration

India’s quest for self-reliance post-independence led to the establishment of Steel Authority of India Limited (SAIL) and Rashtriya Ispat Nigam Limited (RINL) in the 1950s and 60s.

This resulted in the rise of massive steel plants in Bhilai, Rourkela and Durgapur with the assistance of the Soviet Union and other countries.

And, along with Tata Steel, they formed the bedrock of India’s steel industry, contributing significantly to nation-building. And the action only accelerated as the economic reforms of the 1990s ushered in a new era of growth and competition.

More private players like Jindals, Bhushans and Ruias entered the fray, driving capacity addition & technological advancements.

Fast forward to today, and tomorrow

As of date, India’s crude steel production capacity stands at a whopping ~160 million metric tons, with actual production hovering close to 135 million metric tons.

Further, the target for 2030, under the National Steel Policy of 2017, is an ambitious 300 million metric tons, which would place India firmly as the second-largest steel producer in the world.

And leading this capacity addition are four private sector giants, led by Sajjan Jindal led JSW Steel, followed by Tata Steel, Jindal Steel & Power and ArcelorMittal Nippon Steel (AMNS), each of which is rapidly expanding capacity with unprecedented investments.

But, what’s going to power all of this?

India’s vast iron ore reserves of over 30 billion tonnes which has been the lifeblood of our steel industry since forever!

Let’s understand better

For coking coal, India doesn’t have much of quality domestic resources.

But, for the other key raw material, iron ore, India is the world’s fourth-largest producer with an annual output of around 246 million metric tons as of 2023.

The states of Odisha, Chhattisgarh, Karnataka and Goa account for over 70% of the production, with Odisha alone contributing over 120 million metric tons.

And the ones mining the biggest amounts of iron ore include state-owned NMDC and Anil Agarwal-led commodities major Vedanta. And each of these and more players is expanding the production capacity to keep up with the expected rise of steel-making activity in India.

For instance, NMDC has a stated goal of doubling in annual mining production by 2030. Meanwhile, Vedanta is increasing activity at its mines in Goa and Karnataka at a rapid cliff.

This way, the mining sector plays a pivotal role in supplying raw materials like iron ore and coking coal etc to the steel plants.

In turn, the steel industry fuels demand for more these minerals, driving growth in the labour-intensive mining sector, and helping create tens of millions of direct and even more indirect jobs.

A multi-faceted impact 

Infrastructure Development: The transportation of minerals necessitates the development of roads, railways, and ports, further enhancing connectivity and economic activity and creating more jobs and businesses for local micro, small and medium enterprises.

Revenue Generation: Mining activities contribute to state and central revenues through royalties, taxes, and levies. In fact, for mineral-rich states, this is what brings in much of the money for the Governments to fund development. Good examples are states like Jharkhand, Odisha, Chhattisgarh etc.

As a result, regions like Jamshedpur, Rourkela, Bhilai and Vijayanagar have been transformed into massive industrial and economic hotspots, providing livelihoods to several millions of families. It’s expected that Gadchiroli will follow suit, with multiple players entering the region, and working with the government to build the infrastructure to support this boom. 

In each of these regions, the multiplier effect of these industries is evident in the development of infrastructure, housing, education, and healthcare in these areas.

Let’s understand better with a view into what has happened in Odisha’s Jajpur.

The discovery of more than 2.11 billion tonnes of iron ore here has transformed the fortunes of this underdeveloped and largely agrarian part of eastern Odisha.

Since the mining operations began, it has attracted massive investments, with notable ones from Jindal Stainless and Tata Steel (in Kalinganagar) and more. And, out of these, the Tata project alone is expected to create more than 60,000 direct and indirect jobs.

Following the discovery, and to further boost the mining output, India has also seen the emergence of Dhamra port, which has significantly improved connectivity and trade.

All of this has also enriched the state Government in a big way, which earned a good part of over Rs 15,000 crore of mining royalties from Jajpur alone. Meanwhile, the per capita income in Jajpur has increased significantly, surpassing the state average. Access to education and healthcare has also improved, with the establishment of new schools, colleges, and hospitals.

This is the story of Jaipur alone! 

Not without it’s roadblocks

The mining and minerals industry is not without its challenges. Chief among them are environmental concerns, regulatory hurdles, and land acquisition issues have often slowed down the pace of development.

For instance, the Supreme Court’s intervention in Goa and Karnataka led to a complete halt in mining operations, affecting iron ore supply and prices, and also causing a major loss of income and livelihood for countless people in the affected areas.

And it’s only recently that those mines have begun to come back to life again. Nonetheless, as the steel economy grows, the mining industry will also grow along.

Conclusion

India’s steel industry stands at a crucial juncture, poised to play a pivotal role in the nation’s economic transformation.

As India marches towards its goal of becoming a $5 trillion economy, the synergy between steel and mining, coupled with favourable government policies and technological advancements, will play a key role in propelling India towards becoming a global steel powerhouse.

From ancient forges to modern marvels, steel continues to be the backbone of India’s growth story, driving progress, creating opportunities, and shaping a brighter future for generations to come.