(a) whether it is a fact that the Planning Commission has approved the expansion plan for Rashtriya Ispat Nigam Ltd.(RINL) to increase its production from the present 31/2 million tonnes to 7 million tonnes.

(b) if so, the details thereof;

(c) whether it is also a fact that Government are seriously thinking of merging RINL with SAIL;

(d) if so, the reasons therefore;

(e) whether any consultations with State Government and the major political parties of the State have been held; and

(f) if so, what are Government`s views thereon?

(i) Provision of a new Blast Furnace of 3800 cum capacity for additional 2.5 MT production of hot metal.

(ii) Provision of two additional converters each of 150 cum capacity and two 6-strand billet casters in addition to one 6 strand round caster in SMS-2.

(iii) Facilities regarding desulphurization of hot metal, second ladle furnace, RH Unit in Steel Melt Shop-I (SMS-I) and Electromagnetic Stirrers in Continuous Casting Machine (CCM).

(iv) Installation of 2 Nos of vertical shaft kilns of 500 tpd capacity in Calcining Plant.

(v) Installation of 3 nos. 67.5 MW turbo generator on Build Own Operate (BOO) basis in Captive Power Plant.

(vi) Independent re-circulating systems with cooling towers, pump houses and treatment units.

(vii) Installation of 2x850 tpd Air Separation Plant in expansion stage on BOO basis to take care of additional requirement of oxygen.

(viii) The proposed construction schedule will be 36 months from the date of approval when all major process units are completed including Wire Rod Mill (WRM) and Seamless Pipe Mill. The special Bar Mill and Structural Mill will be commissioned within 48 months from the date of approval.

(c)&(d): There is no formal proposal at present for merger of RINL with SAIL.

(e)&(f): Informal consultations have been held with the Andhra Pradesh Government who are opposed to the basic concept of merger of RINL with SAIL.

STATUS OF IISCO BURNPUR

(b) the striking and marked improvement made after being taken over in terms of reduction of accumulated loss, reduction of high cost operation, modernisation, reduction of large working force and increase in productivity; and

(c) whether there is any further move to take over a few loss making plants under SAIL?

(b) if so, the details thereof;

(c) whether related issues pertaining to the proposal have been adequately considered and all affected interests have been consulted in the matter; and

(d) if so, the details thereof and if not, the reasons therefor ?

(b) to (d): Do not arise in view of (a) above.

RISING STEEL PRICE

(b) if so, the details in this regard, with comparative figures for the last three years;

(c) whether it is also a fact that this price rise is the cause for rising manufacturing cost of motor vehicles;

(d) if so, the details in this regard, with particular reference to the impact of steel price rise on small scale industries dependent on steel; and

(e) the measures initiated to provide relief to the SSIs?

(b) The quarter wise details of steel prices at Mumbai market from April 2003 onwards, of a representative category of steel items, is given in the annex.

(c) & (d): As a direct input, steel accounts for about 5 per cent of the raw material cost in both commercial and passenger vehicles. Therefore, price of steel, as such, is only a marginal factor in the manufacturing cost of a motor vehicle. However, the rise in price of auto components, which are also manufactured in the small-scale sector and have significant iron and steel content, has a larger impact on the manufacturing cost of a motor vehicle. But changes in steel prices are not automatically adjusted to the price of components since supply of components to the automobile sector is contract based. The fabrication industry is another sector in the small-scale category that is dependent on steel and vulnerable to rise in steel prices mainly because this sector does not enjoy MODVAT facility.

(e) In a liberalised environment the Government does not intervene directly in the market to influence prices. The market forces determine the prices. However, during the last two years the Government, through its policy initiatives, has taken several steps to ensure availability of steel, especially to the small sector and stabilise the price in the domestic market. The automobile industry imports large quantities of steel. The government removed the requirement of mandatory certification of imported steel materials by the Bureau of Indian Standards to ease the supply of these inputs to downstream processors by providing them an option of unimpeded import. Further, the customs duty on steel has been brought down significantly. The steel plants in the public sector have been advised to keep a check on prices and accord due priority to domestic demand. Priority allocations of iron and steel materials for the SSI sector have also been substantially increased.

POSCO's MOU WITH ORISSA

(b) whether the details of the MoU has been made public and if so, whether POSCO will be allowed to export high grade iron-ore against import of low grade iron-ore; and

(c) how soon the final Memorandum of Agreement is likely to be signed between POSCO and the Government of Orissa?

(a) Yes, Sir. POSCO of South Korea has signed a Memorandum of Understanding with the Government of Orissa on 22.06.2005 for setting up a 12 million tonne steel plant with a proposed investment of around $ 12 billion.

(b) Yes, Sir. As per the MoU, the Company may swap certain quantities (not exceeding 30 per cent of the total annual requirement for the Paradeep Plant) of such domestic iron ore which has high alumina content with an equal quantity of imported low alumina content iron ore of equivalent or better Fe content for blending, in order to produce better quality steel in the Paradeep Project and thereby conserve energy. Any export of iron ore by way of swap will be allowed only after an equivalent quantity of ore has been imported for the plant. The extent of the above quantity of iron ore by way of replacement through import of higher grade iron ore will be within the framework of the Export-Import Policy of the Government of India applicable from time to time.

(c) As per the MoU, POSCO will establish an Indian Company. The agreement will be signed between the Government of Orissa and POSCO along the lines of the MoU within 6 months from the date of formulation of the Indian Company.

POLICY ON EXPORT OF RAW MATERIALS FOR STEEL

(a) whether India, being the world`s third largest iron- ore producer, is framing a long-term policy on export of raw materials used to make steel;

(b) if so, the details thereof;

(c) to what extent it would be different from the present one;

(d) whether, under existing policy, India allows free export of iron ore with a ferrous content of less than 64 percent but a licence is needed for selling high-grade iron -ore; and

(e) if so, to what extent these measures will be considered in the new policy to make it more flexible?

(a)&(b): The export policy for raw materials like iron ore, chrome ore and manganese ore has already been formulated and notified by Director General of Foreign Trade (DGFT) under the Foreign Trade Policy, which is valid from 1-4-2004 to 31-3-2009. The existing policy for export of iron ore is already flexible in the way that iron ore with ferrous content upto 64 per cent is free for exports, while exports of high-grade iron ore (64 per cent Fe and above) are canalized through Metal and Minerals Trading Corporation Limited. In relaxation to the policy, mine-owners who have surplus iron ore after meeting the demand of domestic industry and MMTC are also allowed to export high-grade iron ore under licence.

(c) Does not arise in view of above

(d) Yes sir, (e) Does not arise in view of (a) & (b) above.

EMPLOYMENT TO DISPLACED FAMILIES AT VSP

(a) the number of families who lost their lands due to acquisition of their lands by Visakhapatnam Steel Plant Authority;

(b) the details of Act passed/agreement made in the past to give direct employment to such families in the steel plant at Vizag;

(c) the details of jobs provided so far to such families;

(d) whether direct recruitment took place while many of the entitled youths out of such families still remain to be absorbed;

(e) if so, the reasons therefor;

(f) whether Government will absorb the remaining youths of such families;

(g) if so, by when; and

(h) if not, the reasons therefore?

(a) The lands for construction of Visakhapatnam Steel Plant (VSP) were acquired by the State Govt. of Andhra Pradesh on behalf of the Government of India. The Government of Andhra Pradesh has informed that 14,563 families were affected due to acquisition of lands for VSP.

(b) There was no Act passed or agreement made in the past to give direct employment to the displaced families in the steel plant at Vizag. In a high level Committee meeting held in 1981 the then Managing Director of VSP agreed to provide employment to a maximum of 5000 displaced persons in VSP.

(c) Against the commitment by VSP to provide employment to 5000 displaced persons, 6310 displaced persons have already been provided employment in VSP. Based on the skill, qualifications and experience of the displaced persons they have been inducted in unskilled jobs i.e. khalasis, skilled i.e. technicians and highly skilled i.e. chargemen and also in the administrative cadre after following due process of selection.

(d) & (e): Direct recruitment to meet the requirements of different skilled manpower was done by the Company from time to time in which the displaced persons were also allowed to participate in the selection process. As per the commitment made, VSP gave preference to displaced persons while providing employment and even gave relaxation in age, qualifications and experience to the displaced persons.

(f) to (h): As and when there is a need for recruitment to posts in the non-executive cadre, this is done through the Employment Exchange/Press advertisement and after following the approved laid down procedure. Displaced persons fulfilling the eligibility criteria will also be allowed to participate in the selection process along with other candidates. The induction of manpower in VSP is on the basis of specific job requirements from time to time and it will depend on the availability of vacancies and suitable candidates. No time frame can be set for induction of displaced persons.

PRICES OF COKING COAL AND IRON ORE

(a) whether it is a fact that due to decrease in the prices of iron-ore and coking coal, the prices of steel have decreased;

(b) if so, the extent of decrease in the prices of iron-ore and coking coal in June and July, 2005; and

(c) the evaluation regarding effect on the cost of steel production in the country due to this decrease?

(a)to(c): Steel prices are governed by the interplay of market forces of demand and supply. In general, prices of steel in the domestic market move in tandem with international prices. Prices of iron ore and coking coal only partly determine the final prices of steel. The recent drop in domestic steel prices is due to a general reduction in international prices. As per reports received, the long term prices of iron ore and coking coal in 2005-06 are in fact higher than those prevailing in 2004-05. However, spot prices of both iron ore and coking coal have come down in June and July 2005 as compared to May 2005 with price of iron ore fines reducing from approx. $ 63.0 per tonne to about $ 51.0 per tonne and price of coking coal from approx. $ 126 per tonne to about $ 115 tonne.

GUIDELINES ON ALLOTMENT OF IRON ORE MINES

(a) whether Central Government are considering to bring new guidelines on allotment of iron-ore mines to remove anomalies in current system;

(b) if so, the details of the same;

(c) whether to rectify these anomalies, Government have constituted expert group for formulating national guidelines on criteria for granting approval of mining leases relating to iron-ore, manganese-ore and chrome-ore; and

(d) if so, by what time this group is likely to submit its recommendations to Government?

(a)to(d): An `expert group` has been constituted by the Ministry of Steel with the following terms of reference: `To formulate guidelines pertaining to Iron Ore, Manganese Ore and Chrome Ore regarding giving preferential mining rights to certain persons by the State Government under section 11(5) of MMDR Act. 1957`.

This group is being chaired by Sh. R. K. Dang, former Secretary, Ministry of Mines. The tenure of the `expert group` is 3 months from the date of notification of the its constitution i.e. from 20-4-2005. This tenure has been further extended by 15 days w.e.f. 20-7-2005. The group is expected to submit its recommendation at the end of its extended tenure.

MOU WITH POSCO

(a) whether it is a fact that the Government of Orissa and Korean steel giant POSCO have signed an MoU for setting up a 10 MT plant at Paradip;

(b) if so, the details thereof and the inflow of FDI in this case;

(c) the share of Government of Orissa in management of the plant and in finances; and

(d) the likely date of commercial production and how the cost of production would compare with existing plants?

Details of the MOU along with the FDI involved therein.

--POSCO has proposed to set up a 12 million tonnes integrated steel plant at Paradeep, district Jagatsinghpur, Orissa.

--The project would be implemented in two phases. Each phase will have two modules of 3 million tonnes per annum crude steel capacity.

--Proposed investment is of the order of around US $ 12 billion (Rs.51,000 crores approximately).

-- POSCO will also set up infrastructure necessary for the integrated steel plant, related projects and related mining of iron ore and other ores.

-- The acquisition of the private land will be as per the Land Acquisition Act.

-- For rehabilitation of displaced families, Rehabilitation and Resettlement Package would be implemented as per prevailing guidelines and practices.

-- The company will need 600 million tonnes of iron ore for 30 years. The company may swap certain quantities (not exceeding 30 per cent of the total requirement of the Paradeep plant annually) of such iron ore which has high alumina content with an equal quantity of low alumina content iron ore. No export of iron ore will be allowed from the captive mine except by way of full replacement through import of equal quantity of high grade ore and within the limits mentioned above.

-- Prospecting license and captive mining leases for 600 million tonnes of iron ore would be granted in accordance with the prescribed procedure and after completion of required milestones as specified in the MOU, including approvals of GOI.

-- Water will be provided from suitable source(s) for construction and operation as per the prevailing rates, subject to availability.

-- The State Govt. would consider granting to the company such incentives and concessions as are provided in the relevant Industrial Policy Resolution in force on this date.

--The State Govt. shall coordinate with the Ministry of Railways for early completion of Daitari - Banspani rail link, development of Haridaspur - Paradeep rail link and Banspani - Paradeep rail link.

--The State Govt. shall provide all support to facilitate the early completion of the National Highway between Haridaspur (Chandikhol) and Paradeep and for upgradation of State Highway from Cuttack to Paradeep to a two lane road.

-- The State Govt. shall actively consider construction of two lane, free access public roads connecting the steel project, the mine project and the integrated township development to the nearest National Highway or State Highway.

-- The State Government shall establish a special `Single Window Clearance Committee` to ensure clearances under State laws from agencies / departments within specified time limits.

MERGER OF IISCO WITH SAIL

(a) whether Government have approved the merger of Indian Iron and Steel Co. with SAIL and if so, the details thereof;

(b) whether merger will help SAIL to scale up crude steel production and if so, the details thereof;

(c) whether SAIL will get control of iron-ore and coal reserves and if so, to what extent the production will increase; and

(d) how much amount SAIL will infuse in IISCO to make it profitable?

(a) The Government has approved the merger of Indian Iron & Steel Company (IISCO), a wholly owned subsidiary of Steel Authority of India Limited (SAIL) with SAIL. SAIL will take over all obligations, rights and liabilities of IISCO, including its permanent employees without any interruption in their services.

(b) There would be no overall increase in Crude Steel production as IISCO is already a subsidiary of SAIL. However, the total crude steel production capacity of SAIL after merger will reach 12.68 million tonnes (mt) from its present level of 12.3 mt.

(c) With the merger of IISCO with SAIL, all assets of IISCO including iron ore and coal reserves will be taken over by SAIL. The production envisaged from collieries and mines will be commensurate with production as envisaged in Corporate Plan-2012.

(d) IISCO is already a profitable unit and has made net profit of Rs.27.09 crores and Rs.46.59 crores during the year 2003-04 and 2004-05, respectively. Further fund infusion in IISCO will be determined by the Corporate Plan 2012 prepared for future development of IISCO.

PREVENTING DELAYS IN IMPLEMENTING POSCO DEAL

(a) whether the project signed by the Government of Orissa with Korean Steel Co. will create around 13,000 jobs directly and estimated 35,000 indirectly in related sector like ancillaries;

(b) whether Government of India will suitably advise the Government of Orissa to ensure that no delay in the implementation of the project takes place;

(c) if so, whether Government possess model guidelines in this regard based on their experience gained in similar projects earlier; and

(d) if not, whether Government would start such an exercise immediately, so as to eliminate any avoidable delay?

(a) Yes, Sir. The entire project including mining, steel plant and port is likely to generate direct employment for about 13,000 persons and indirect employment for 35,000 persons.

(b)to(d): In a delicenced and deregulated environment the Government does not intervene directly but acts as a facilitator to foster growth of steel industry in the country.

IRON ORE PRODUCTION

(a) the quantum of iron-ore produced during the last two years and the names of the countries to which iron-ore was exported along with the quantum of such export to each country;

(b) whether it is a fact that some private sector companies like `POSCO` have been permitted to commission steel plant in the country with the guarantee of supply of iron-ore and also with permission to export; and

(c) if so, the reasons therefore in view of less production of iron-ore in the country as compared to its requirement?

(a) The production of iron ore during last two years is as mentioned below:

The details of export of iron ore to various countries are as below:

(b)&(c): Governments of some mineral rich states, like Orissa, have signed memorandums of understanding (MOU) with steel companies which, inter-alia, includes an undertaking from the state government for grant of prospecting licenses and mining leases of iron ore for captive use. This reflects the desire of these states to use their natural resources for their rapid industrialization. Normally, the undertaking to grant mining leases, would stipulate the use of the iron ore only for captive purposes. In the specific case of POSCO, the MOU signed between Government of Orissa and the company, only envisages limited swapping of high alumina content iron ore with low alumina content iron ore of equal quantity on a net nil export basis within the framework of the applicable Export-Import Policy of the Government. No reserve of iron ore for the purpose of direct export is provided for in the MOU. Further the production of iron ore has always been more than the demand/requirement of iron ore in the country.

(a) whether there is any proposal for merging Mecon Limited of Jharkhand with the Steel Authority of India Limited;

(b) if so, the view point of Government in this regard;

(c) whether Mecon`s employee unions have been consulted in this regard; and

(d) if so, the details thereof?

(a) A proposal had been received from MECON Limited for its merger with Steel Authority of India Ltd. (SAIL).

(b) The Government propose to continue MECON as an independent entity.

(c) No, Sir.

(d) Does not arise in view of (c) above.

(a) whether Government are contemplating to announce a new steel policy; if so, by when;

(b) whether Government are projecting ten per cent growth rate for steel sector in the country;

(c) whether Government have set up any expert committee to formulate guidelines for allocating mining leases for iron ore, manganese and chrome ore in the country; and

(d) if so, by when the committee is expected to submit its report ?

(a) Yes, Sir. The National Steel Policy will be announced after the approval from the Cabinet Committee on Economic Affairs.

(b) The National Steel Policy envisages an indigenous steel production of about 110 million tonnes per annum by 2020, which implies a compounded annual growth of 7.4 per cent.

(c) Ministry of Steel has constituted an `expert group` with the following terms of reference: `To formulate guidelines pertaining to Iron Ore, Manganese Ore and Chrome Ore regarding giving preferential mining rights to certain persons by the State Government under Section 11(5) of MMDR Act. 1957.`

(d) The `expert group` is expected to submit its recommendation by the end of this month.

(a) the names of the factories set up by Steel Authority of India Ltd. in the country together with the location thereof;

(b) the profit earned by these factories separately during the last four years; year-wise; and

(c) the amount of re-investment made in Chhattisgarh out of the amount of profit earned by the Bhilai Steel Plant situated in the State during the last four years, year-wise?

(a)&(b): The location wise details of the steel plants under Steel Authority of India Limited and profits before tax (PBT) / loss of the company in the last four years, year-wise are as under:

(c) The investment made in Chhattisgarh State by Bhilai Steel Plant on capital expenditure and expenditure on peripheral development, during the last four years, year-wise is as follows:

(a) whether it is a fact that the total demand of chrome ore for stainless steel and other steel related industries in the country has increased; and

(b) if so, the details of any long term projections of demand relating to such industries and the details of plan, if any, to meet their requirement of raw materials particularly chrome ore?

(a) Yes, Sir.

(b) As per the Working Group Report of X Five Year Plan constituted by Planning Commission, the domestic demand of Chromite (considering 6 per cent growth in production of Ferro Chrome) will be 18.28 lakh tones during 2011-12. The available resources are sufficient to meet the requirement of chrome ore. Furthermore, Export Policy of maintaining ceiling on export of Chrome Ore is continuing in order to ensure the availability of Chrome Ore for domestic users.

(a) whether there are any long-term plans for healthy growth of the steel sector keeping in view the raw material resources in the country; and

(b) the details of facilitating role being played by his Ministry in achieving planned growth?

(a)&(b): Yes, Sir. The Government is formulating a National Steel Policy (NSP). The long- term goal of the NSP is that India should become self reliant and globally competitive in the steel sector. The NSP inter-alia acknowledges that the country has rich endowment of iron ore and non-coking coal and outlines the policy for making such critical inputs available to the industry. Apart from the broad based policy statement, the NSP also chalks out specific action points for the Government to achieve the policy objectives.

VAT'S EFFECT ON STAINLESS STEEL INDUSTRY

(a)to(c) In a liberalised environment the Government does not intervene directly in the market to influence prices. The market forces determine the prices. However, during the last two years the Government, through its policy initiatives, has taken several steps to ensure availability of steel and stabilise the price in the domestic market which inter-alia include the following:

Even before the announcement of the Union Budget 2004-05 Government had taken certain measures to ease imports which inter-alia included