India’s steel ministry has urged state-owned companies like Steel Authority India (Sail), Rashtriya Ispat Nigam (RINL), Kudremukh Iron Ore Company (KIOCL), National Mineral Development Corporation (NMDC) and Moil to refrain from curtailing production, according to a Davis Index source.
State governments in India have ordered all non-essential business to remain shut till the end of March to contain the spread of COVID-19. Steel, Coal and Iron, however, fall under the Essential Commodities Act.
The ministry reviewed preparedness at the state-owned plants to ensure cases of COVID-19 do not rise and addressed problems faced by them due to the lockdown. Preventive measures like suspension of biometric attendance, arranging isolation wards and scanning of non-company staff using thermal scanners are being implemented.
Induction furnaces in Mandi and Ludhiana, however, have been shut temporarily which will impact steel output in the coming days. Despite this halt in production these mills will continue to pay Rs500,000-1,000,000 per day. Subsequently, the cost of restarting the idled furnaces will also have to be borne by these mills. In many parts of India secondary mills will remain shut till March 31 in keeping with the restrictions to contain the rise in cases of COVID-19.
RINL has recently completed its expansion programme to double the capacity from 3mn mt to 6.3mn mt. Sail has an annual steel production capacity of 16.30mn mt and targets to produce 50mn mt of hot metal by 2025. KIOCL operates an iron oxide pellet plant with 3.5mn mt capacity and annually produces 227,500mn mt of hot metal. NMDC is in the process of increasing its existing annual iron ore production capacity of 43mn mt to 67mn mt.