New Delhi (India) - A century ago when India was a British colony, Sir Frederick Upcott, the then chief commissioner of Great Indian Peninsular Railway, vowed to "eat every pound of steel rail" if Tatas succeeded in making the alloy.
Tata Steel's 12-billion dollar takeover of Britain's largest steel maker Corus Group Plc in early 2007 not only catapulted the Indian conglomerate to the global corporate centre-stage, but also gave other domestic Companies the self-belief of taking on multinationals much bigger in size.
Not surprisingly, several compatriots such as Essar and JSW Steel bought Companies overseas while a few others initiated steps to acquire coal or iron ore mines abroad to ensure steady supply of raw materials for expanding output.
Back home, world's largest steel firm ArcelorMittal and South Korea's Posco struggled to start work on their three massive projects in Orissa and Jharkhand that are together estimated to cost more than 35 billion dollars.
The year also saw heated debate within the industry and the government on the critical issue of iron ore exports. The government in its Budget imposed a tax on ore exports, but later scaled it down after much hue and cry. Meanwhile, UK-based metals firm Vedanta Resources acquired the country's top private iron ore exporter Sesa Goa to diversify its portfolio that already included aluminum, copper and zinc.
Besides, the government raised the production target of country's steel making capacity to 124 million tons by 2011-12 from 56 million tons at present. In line with this goal, state firm SAIL announced an investment of Rs 53,000 crore to hike production capacity to 26 million tons for maintaining its leadership position in the country.
The steel sector, in fact the entire Indian industry, could not have asked for a better start to 2007 with Tata Steel outbidding Brazil's CSN in January to acquire Corus
Group to become the world's sixth-largest steel maker in a deal that was the biggest by an Indian company in any sector.
But Tatas were not satiated with the Corus deal only. Tata Steel inked an initial pact with Vietnam Steel Corp for building a 4.5 million tonne plant in the South-east Asian nation. It then notched a deal to extract coal from a block in Mozambique with Australia-listed Riversdale Mining. Later, the company entered into a pact with Ivory Coast government-owned SODEMI to mine iron ore in the African nation.
Ruias-led Essar also took the west by surprise by buying Canada's Algoma Steel for 1.58 billion dollars and US-based Minnesota steel plant for an undisclosed price.
Similarly, Sajjan Jindal-led JSW Steel agreed to buy Argent Independent Steel, a service centre in the UK. It is also in talks with a local player in Mozambique to conduct due diligence on a site that could be later mined for coal.
While private Companies were going the whole hog, state firms also woke up to the realities of rapidly rising prices of raw materials such as iron ore in the international market.
Steel Authority of India Ltd, Rashtriya Ispat Nigam Ltd, NTPC, Coal India and NMDC formed a joint venture to acquire properties abroad. The new entity is looking to acquire rights for coal mining in Africa, especially Mozambique.
Reports of possible dilution of stake in SAIL and RINL raised eyebrows in the industry as also in the government during the year, but the Steel Ministry denied any such move.
Meanwhile, arch rivals India and China decided to join hands in extending cooperation in iron and steel sector and may sign a preliminary agreement for the purpose next month.
The year saw Indian steel makers starting implementing of their massive expansion plans. Government estimates suggest that the sector will receive a whopping investment of Rs 2,75,00 crore by 2011-12 and Rs 8,70,000 crore by 2019-20.
This optimistic scenario could, however, remain only a pipe dream if the government does not take urgent steps to help South Korea's Posco and billionaire L N Mittal-led ArcelorMittal to start working on their massive projects.
Posco's 12-million tonne project worth Rs 52,000 crore saw little movement even this year. The project has run into rough weather with local protesters hampering the start of work at the site near coastal town of Paradip in Orissa.
India-born Lakshmi Niwas Mittal, during a visit to India, announced that ArcelorMittal plans to invest about Rs 80,000 crore to build two mega steel plants in Orissa and Jharkhand, but nothing much has happened on the ground.
Another major hurdle coming in the way of both the Companies is allocation of iron ore mines. The famous Chiria mines in Jharkhand remained a bone of contention between ArcelorMittal and state-owned SAIL with both the Companies claiming their right over it. Mineral-rich states such as Chhattisgarh, Jharkhand and Orissa wanted the Centre to give preference to public sector firms over multinationals while deciding to allocate mines for exploration and production.
A section of the government and the industry made a case for conserving iron ore in view of the capacity expansions underway. This is especially important to compete with China.
The sector will need 138 million tons of iron ore by 2011-12 and 320 MT by 2019-20 to support steel output capacity of 191 MT. In fact, assured supply of iron ore and coal will determine the survival of steel Companies and this must be the top priority of Indian firms in the years ahead.