Q4. WHICH FACTORS PLAY POSITIVE ROLE IN THE ESTABLISHMENT AND DEVELOPMENT OF IRON AND STEEL INDUSTRY? DISCUSS.
WHAT ARE THE FACTORS WHICH HELP IN LOCATION AND GROWTH OF IRON AND STEEL INDUSTRY? EXPLAIN.
For the establishment and development of the iron and steel industry, there are two kinds of factors; economic factors and geographical factors. These factors are also known as ‘Location Factors’ and Survival Factors’. Location factors include cost of land, availability of skilled and trained labour, supply of energy, availability of water, markets for sale and availability of raw materials. On the other hand, Survival Factors include are further divided into two; coast of location like machine cost and government taxes and secondly production cost like wages, transport cost and sales tax etc.
FACTORS OF LOCATION AND DEVELOPMENT:
The following factors play decisive role in location and development of iron and steel industry:
1. WATER AND LAND:
For cooling the molten steel, making steam and casting the steel, abundant quantity of water is required therefore, the steel industry should be located at the places where water supply is abundant, The huge projects like steel mills can’t be established at the small plot therefore, large and leveled plots of land play decisive role in the location and development of iron and steel industry.
Large size plots are needed also because the entire process of steel making takes place in a single story building This is the reason that the steel industrial units are generally located in suburbs or far from the cities or in the vicinity of rural areas where the cost of land is low and so, in this way, the cost of location may be reduced.
As the abundant quantity of water is required, the iron and steel industrial units are established on the banks of Lakes or rivers. For instance, for cooling one tone molten steel, 65,000 gallons of water is needed. Water is required not only for cooling the steel but for washing and generating the hydraulic machines. For curtailing the use of water, used water is recycled.
2. PROXIMITY TO IRON OAR:
For steel making, abundant quantity of iron oar and limestone is required. Iron oar is mined from the mines with other metals and impurities therefore, not only iron oar and limestone is needed for steel making but these raw materials should be available near the steel project otherwise the huge cost of transport would make the project unprofitable.) Apart from limestone, tungsten, nickel and chromium are also used as raw materials in steel making. Limestone is used for separating Alumina, sulfur and other elements from iron oar. In the initial period of establishment of steel industry, the countess having iron oar established steel projects. Iron oar reserves are in abundance inFrance,America,IndiaandBritain.
3. MEANS OF TRANSPORT:
Both iron and steel are the metals which are not only heavy in weight but they also occupy large space. For transferring the raw materials from the mines to the factories and the steel and iron from the mills to the market places, fast, modern and cheap means of transport are of basic need so that the cost of transport could be confined at a reasonable level Wheresoever, transport facilities are available, steel industry should be established at such places. The ‘Theory of Minimum Transport Coast’ should be the guiding principle in the location of steel industry but generally this theory is over sighted and other. Considerations are kept in view at the time of establishing the steel industry like social and political considerations.
Huge amount of capital and steel industry are complimentary because the steel project is not a small project. This is the reason that in most of the countries, public sector monopolizes steel industry. Private sector faces the problem in arranging such huge capital. For instance, Government of Pakistan itself sought Out thee financial and technical assistance of Government of formerUSSR. A large amount of capital is required because large size plot of land, imported heavy machinery, large quantity of raw materials, and wages to the great number of the workers and mean of transport on the large scale are required for the steel industry. Some times the establishment of a steel project goes beyond the reach of the government also due to the huge cost and this is the reason that 90 per cent of the steel industry has been concentrated in big 6 countries only.
5. PROXIMITY TO COAL:
For smelting the Iron oar and then melting other metals also with the iron oar, enormous high degree of heat is needed. Coal, with reference to fuel, plays very important role in sleet industry due to which steel industry tends to be established in the coal areas In the initial period, steel industry established in the coal regions but with the passage of time new sources of energy have come into being like charcoal, Anthracite, coke, electricity, solar and nuclear energy. In the beginning where the steel industry established due to coal factor include Ruhr valley inGermany,Pittsburghregion inUSA,New CastleinBritainand Jamshed Pur and Durga Pur inIndia.
Markets are required for the sale of iron and steel therefore, steel industry should be located at the places which are near to the markets. For instance, steel industry localized in Chicago (USA) due to nearness of steel markets., Steel industry, on the basis of market factor, tends to be established in the countries where reserves of iron oar and other raw materials needed for steel making are few or not at all. For instance,Japanlacks in steel raw materials but steel industry is running on the basis of nearness of steel markets and import of iron oar and other raw materials from other countries. The steel centers which established inJapanon the market factor include Tokyo Yokohama andOsaka.
7. LABOUR SUPPLY:
Since steel industry comprises a very large size, the large number of labour force is required to run the industry. Not only the large numbers of workers are required but they must be trained and skilled in the production of steel. It should also be kept in view at this stage that the skilled and trained labour should also be available on low wages otherwise the labour cost would become enormous making steel project non-profitable.
In addition to the factor cited above, other factors also play crucial and decisive role in the location and development and growth of steel industry which include government industrial policies, standard of management, taxes, level of development of the region, modern and sophisticated technology, strong and well built Infrastructure, means of communication etc. No only for the steel industry but for the establishment and development of all the industries, the most important factor is the Sustained Growth of the economy.