Pak to engage consultant for feasibility study of mini steel plants

Karachi: An international consultant will carry out feasibility study for setting up of mini steel plants based on Kalabagh and Dilband iron ore through blast furnace and basic oxygen furnace route.

The decision was taken at the third meeting of the Committee on Development of Steel Industry, Engineering Development Board (EDB), Ministry of Industries, Production & Special Initiatives, Government of Pakistan held in Islamabad in the last week of August. According to the minutes of the meeting available, the services of consultant would be hired through a body formed under public/private partnership and the EDB would act as a facilitator.

Iron ore mining leases would be provided to the captive users, along with facility of soft loans for prospecting, exploration, mining and development due to long gestation period and low returns. Pakistan Steel Mills will be provided maximum support for iron ore exploration, through a steering committee to be constituted by EDB.

It was decided that Pakistan Council of Scientific and Industrial Research (PCSIR) which is carrying out test trail for production of steel based on Kalabagh iron ore should be extended full support both technical and financial in collaboration with Pakistan Steel Mills and private sector through EDB.

The committee desired that in order to establish steel-city around 3,000 acres of land would be made available in north and south of the country along highways or motorways. Ten years tax exemption to the iron ore based units due to long gestation period, heavy capital outlays and low returns were recommended.

Land area assigned to setup steel mill should be of 10, 20 & 50 acres to help establish integrated steel mills. An area of 500 acres may be allocated for down stream industry, which may require 1/2 to 5 acres of land for each unit.

The land may be offered on ownership basis with pay back period between 10 to 15 years based on biannual payments. The price of land may be determined in consultation with EDB and both the associations of steel sector.

In order to promote setting up of sizeable quality producing and cost effective steel mills, a minimum capacity of 100,000 tons of melting whether they install electric arc furnace or induction furnace and similarly the rolling mills with automation facility of not less than 200,000 tons capacity should be allowed. The certified plans from the respective associations for setting up these units in steel-city should be made mandatory.

To meet the requirement of heavy electric load ie more than 5 MW for integrated steel mill a separate grid station will be required to be installed. The government should provide these grid stations with buy back arrangement as in the case of land on 10-15 years basis.

The steel units may be allowed for the captive power generation with the permission for synchronisation with the national grid.