Tata Steel has withdrawn its membership from an apex steel industry body, Indian Steel Association. To add its CEO and Managing Director has also stepped down from the President-ship of Association which was ending in August. No specific reason was provided of the withdrawal as the spokesperson says there were various considerations. Also, the reason of sudden resignation by CEO of Association is unknown yet.
But sources are claiming that it was over disagreements regarding mining policy. Coming from back ISA members had few differences over the government’s proposal to distinguish between the captive and merchant mining. As Tata Steel holds captive mines which were allotted before the auction regime and were said to be auctioned for 2025, if the government’s proposal is verified.
As the amendment in the Mining and Minerals Act, has stated the extended validity of captive mine leases till 2030 and that of merchant mines till 2020. The government made such proposal or to put it in lay man’s words; government was keen to remove the distinctions between the mines to attract new players in the steel market and encourage further value addition rather than just investing in mines.
Almost all steel companies are surviving in neck deep debt and can move up the value chain to gain better margins rather than digging under and exploring the mine.
Tata Steel owns large captive mines across Jharkhand and Orrisa, along with its plants in Jamshedpur, Kalinganagar as well as Angul. It also mines on iron ore, chromite and manganese for captive usage.
The differences between the associations comes up as the only reason we know of from the sources. Thus the grounded specifications and details will come up with the due course of time. For now, it has withdrawn the membership and the CEO has resigned for the same.