The present location of the iron and steel industries, often situated away from the sources of raw materials, can be attributed to several strategic factors. Firstly, transportation plays a pivotal role in this decision. Establishing these industries closer to major transportation hubs, such as ports, facilitates the efficient movement of raw materials like iron ore and coal from mining regions to the manufacturing sites. Additionally, locating iron and steel plants near transportation networks ensures easy distribution of finished products to various markets. Secondly, environmental considerations influence the choice of locations. The iron and steel production process can be resource-intensive and environmentally impactful. Placing these industries away from densely populated areas helps mitigate potential environmental concerns and ensures compliance with regulatory standards. Lastly, economic factors, including the availability of skilled labor, energy resources, and infrastructure, contribute to the decision to establish iron and steel industries in specific regions, even if they are distant from the original sources of raw materials. Overall, a combination of logistical, environmental, and economic considerations shapes the strategic placement of iron and steel industries away from the sources of raw materials.
UPSC Mains General Studies Paper – 1 Mains 2020
Distribution of key natural resources across the world
UPSC Mains Civil Services IAS Exam Question Paper – 2020
Structure of the Question
- In Introduction,
- Try to compare earlier and present situations of the iron and steel industry.
- In Body,
- Give the reason for shifting of the Iron and Steel Industry and Give examples like market-based industries, and the technology used in the steel industry.
- In Conclusion,
- Try to provide an insight into a futuristic idea talking about the factors that might decide the site for plants.
Answer
Introduction
The iron and steel industry forms the base of all other industries; therefore it is called the basic industry. It is one of the most complex and capital-intensive industries. In the early period of growth, the location of the iron and steel industry was entirely governed by the ratio of raw material assembling cost and distribution cost of the finished product to the consumer. However, with the passage of time, the depletion of raw materials, the emergence of new technologies (like electric furnaces), and fuel-saving transportation, promoted the Iron and Steel industry to locate away from the raw material sources.
Reason for Shift of Iron and Steel Industries Away from the Source of Raw Material
Market-based location:
Market-based location is generally found in countries where coal and iron ore deposits are rare.
For example, Japan is deficient in both iron ore and coal and almost all raw materials are to be imported from overseas countries. This makes Japanese steel plants mostly market-based.
The great ‘Tokyo-Yokohama’ and ‘Osaka – Kobe – Heemeji’ iron steel regions are market-based.
Labor:
The availability of cheap labor is also important. Example: Rourkela plant, Orissa; Bhilai steel plant in Chhattisgarh, mostly in Chota Nagpur region.
Transportation:
The intermediate location of a port like Vizag port because of Vizag Steel Plant, Visakhapatnam gets distinct advantages in terms of the accessibility to raw materials, market, and transportation.
Technology:
Open hearth systems and electric smelters are now used as state of art, and the raw material is being replaced by clean energy. Example: Essar Steels and Tata Steel switching over clean energy.
The raw material-based industries:
The raw material-based industries are now facing disadvantages because of depleting reserves of raw material. Apart from this, the drastic reduction of coal use and the development of fuel economy also attracted industries to the areas where transport is cheaper. For example, a cheap water route or break of bulk location, where due to loading and unloading facilities, raw materials are available at a much cheaper rate.
Developmental policies of government for backward regions:
For example, Bhilai and Salem plants in India.
Strategic reasons:
After WWII, the USA and the USSR adopted a policy to not allow the concentration of the industry in one region. Thus, in the USA some plants were set up in the western region such as California and the USSR in the eastern side towards the Pacific coast.
Conclusion
Nowadays, in the localization of steel plants, each of the three factors, i.e., coal, iron ore, and the market, have equal importance. The geographic coincidence of any two factors, however, determines the steel plant site. Iron & steel being basic industries provide raw materials for other industries, in order to avoid the spiraling effect and ensure fair trade, providing a level playing field to domestic industry. The government has taken steps to make the Make in India initiative.
Frequently Asked Questions (FAQs)
Q: Why are iron and steel industries located away from the source of raw materials?
A: The primary reason for this is the historical development of these industries. Initially, iron and steel industries were established in areas with easy access to coal, which is a crucial raw material. Over time, these locations became industrial hubs, and despite advancements in transportation, the industries remain concentrated in these regions.
Q: How does transportation influence the location of iron and steel industries?
A: Efficient transportation is vital for the iron and steel industries. While raw materials like iron ore and coal may be available in specific regions, the cost-effective transportation of these materials and finished products plays a significant role. Industries tend to cluster around well-connected transportation networks to reduce logistical expenses.
Q: What role does proximity to markets play in the location of iron and steel industries?
A: The proximity to consumer markets is a critical factor. Industries prefer to be close to regions with high demand for steel products to reduce transportation costs and ensure timely delivery. This consideration often outweighs the advantage of being near raw material sources.
Q: Are there environmental factors influencing the location of the iron and steel industries?
A: Yes, environmental concerns have increasingly influenced the location of these industries. Stringent environmental regulations and the need to minimize pollution have led to the establishment of iron and steel plants away from densely populated areas. This shift is to ensure compliance with environmental standards and reduce the impact on local communities.
Q: How have advancements in technology affected the location of the iron and steel industries?
A: Technological advancements, particularly in transportation and logistics, have somewhat mitigated the need for industries to be directly adjacent to raw material sources. However, historical factors, infrastructure investments, and the established ecosystem of support services in certain regions still play a significant role in determining the location of the iron and steel industries.
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