Traditionally, this industry was very capital intensive. Integrated steel plants were built near the raw materials and energy sources. E.g., TISCO. Important raw materials were iron, dolomite and limestone, coking coal.
Why most of the Iron and steel industries are located in eastern and southern India and very less in U.P., Haryana, Punjab, Rajasthan and Gujarat?
- Raw material: That region is less in iron ore, coal, essential for iron and steel, limestone, dolomite and manganese.
- Government policy: Establishment of iron and steel industry in Bhilai and Rourkela were based on decision to develop backward tribal areas of the country.
- Mumbai-Kolkata railway line provides nearest port for the export of steel to other countries.
- Presence of Hydel power: Ex. rivers like Damodar provide continuous energy supply.
SHIFTS IN IRON & STEEL INDUSTRY
Before 1800 A.D. iron and steel industry was located where raw materials, power supply and running water were easily available. Later the ideal location for the industry was near coal fields and close to canals and railways. After 1950, iron and steel industry began to be located on large areas of flat land near seaports. This is because by this time steel works had become very large and iron ore had to be imported from overseas.
In India, iron and steel industry has developed taking advantage of raw materials, cheap labour, transport and market. All the important steel producing centers such as Bhilai, Durgapur, Burnpur, Jamshedpur, Rourkela, Bokaro are situated in a region that spreads over four states — West Bengal, Jharkhand, Odisha and Chhattisgarh. Bhadravati and Vijay Nagar in Karnataka, Vishakhapatnam in Andhra Pradesh, Salem in Tamil Nadu are other important steel centers utilising local resources.
RECENT SHIFTS IN IRON AND STEEL INDUSTRY
- Mini steel plants are being built near the market (as opposed to near the raw material) especially the urban centers. The big cities generate huge waste and out of that a scrap iron is used as a raw material for mini steel plants. E.g. – Delhi. (Example of circular economy).
- These mini steel plants typically employ electric arc process for steel refining, hence are need large amounts of electricity.
- Government is undertaking policies to reduce the logistics cost which is allowing the industrialists to setup industries near the market.
- Old iron ores mines have depleted hence pushing the industries away from traditional locations.
- Shifts in fuel – industries moving from coal rich areas to oil and gas rich areas. E.g. – industries in Lorraine, France and south Luxembourg.
ISSUES IN IRON AND STEEL INDUSTRY
1. Low potential utilisation. E.g. – Durgapur steel plant is working at 50% capacity.
2. Shortage of metallurgical coal.
3. Erratic power supply.
4. Cheap imports due to dumping by countries like China.
5. Global economic slowdown and subdues demand.