Iron and Steel Industry is located in Damodar valley because of:
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The raw material required for Iron and Steel Industry such as coal, limestone and manganese are readily available in the neighbouring areas of Orissa, M.P., Biharand Damodar Valley itself.
Image Source: steel-photo.org/wp-content/uploads/2012/11/krivoy2285gg.jpg
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This area is well connected with the means of transport like roads and railways. In fact it the transport nerve centre in East India.
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Damodar Valley Corporation (DVC) is a very good source of power. The Iron and Steel industry is able to meet all its power requirement from DVC.
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Labour and other facilities are available from surrounding States.
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Iron mid Steel industry requires water in plenty. Damodar Valley through its rivers, dams and canals fulfils this requirement also.