Steel and Water

Growing Blue

Insufficient Water Supplies Could Impact Future Businesses

India’s economy is expected to grow by 9 percent in the next year, according to a recent announcement from Indian business mogul Mukesh Ambani. But India’s continued economic growth is contingent on the country having adequate access to clean water. The U.S. State Department predicts that by 2020 India will be “water stressed,” which could have a significant impact on the country’s ability to compete in the global economy.

India’s emerging steel industry, which requires water, provides one example of how a country’s water shortage could impede its economic growth.

Global steel giants ArcelorMittal and Posco have announced they are investing $80 billion in steel production in the subcontinent. This investment would put India ahead of Japan and make it the second-largest steel producer in the world.

As with most industrial processes, steel production requires billions of gallons of water. In fact, it will take 640 billion gallons of water each year to produce the 160 million tons of steel that these companies plan to manufacture, based on the average water consumption of U.S. steel mills. Severe water shortages in India could impede the rate of steel production, compromising these companies’ ability to thrive as drivers of India’s economy.

Producing goods requires water, at the same time that India and other areas of the world have come under increasing pressure to preserve water resources and limit pollution. Water scarcity and water quality are predicted to be one of the largest economic and health concerns in the coming decade, meaning that businesses will need to take into account an area’s water resources before developing a region.

Some may choose to avoid areas that poorly manage water resources altogether. Companies that choose to locate in areas with increasing population and significant growth (and increasing water demand as a result) will need to be efficient and innovative. A country that manages its resources poorly could limit its economic growth, potentially affecting its ability to stay competitive within the global marketplace.

Read more:

http://www.businessweek.com/magazine/content/10_42/b419902070025.htm
http://www.veoliawaterna.com/north-america-water/ressources/documents/1/19979,IFPRI-White-Paper.pdf
Charles Fishman, The Big Thirst