Home ECONOMY Unviable downstream industries affecting steel production, experts

Unviable downstream industries affecting steel production, experts


Reported by Sandeep Pattnaik

Bhubaneswar, Feb 28:

Small and medium downstream industries, as part of the total value chain in steel making process, are subject to many challenges and  are on the verge of closure, thereby affecting the overall steel production in the country, said experts at the second edition of the ‘Minerals and Metal Conclave’ here on Friday.

Pelletisation of iron ore fines that transform fine iron ore concentrate into pellets suitable to feed blast furnace plants to produce steel has been confronting many challenges.

“Requirement of heavy investment to set up a palletisation plant, change in Government policies not conducive for beneficiation and agglomeration of iron ore fines, lower off-take of pallets from the mega steel plants, scarcity of quality ore and pellets made out of low-grade ores, high input, capital and logistics costs has made the existence of industries in the sector unviable,” said ND Rao, MD, Brahmani River Pellets Ltd (BRPL).

Sponge iron plants, an important segment of the Indian steel industry, are also passing through what is perhaps the worst crisis in the sector. It is subject to challenges like threat from imports of the steel melting scraps, threats from Imports of DRI / HBI, and environmental pollution especially in case of coal-based sponge iron plants, which are highly energy intensive and leads to higher carbon load on climate, he said.

“Sponge iron industry which saw an uptrend fuelled by increasing demand of steel in the country, has almost stagnated since 2009 due to several reasons like de-acceleration in the steel demand, restricted availability of vital inputs like iron ore, non coking coal, natural gas and environmental related issues,”D P Deshpande, MD, Tata Sponge Iron Ltd, said.

“With steel demand set to reach a whooping 200 million tons per annum (MTPAs) by 2025, production of iron ore has to be in tandem to meet the requirement of the country,”Manikant Naik, Chief Resident Executive, Tata Steel Ltd said. “The mining mess in the country, particularly in Odisha has taken a toll on the iron ore production,” he added.

“For the last 3 years from 2010-11 to 2012-13, mining activities havealmost came to a standtstill, resulting in decrease in iron ore production,” Naik added.

Available data as per Indian Bureau of Mines (IBM) Mineral yearbooks show that while iron ore production in the country was 80.8 MT in 2000-01, it  increased to 219 MT in 2008-09, recording around 173% growth in output.

“Our iron ore resources are finite and we should try through all possible technological and R&D inputs to put more and more iron ore fines to use, leaving practically no wastes, even partly utilizing the slimes of washing plants, after due processing,” he further said.

“At the same time, there is a visible threat to the Indian steel industry as the export of iron ore has seen an uptick since 2000 and there should be some constraints on export of this vital commodity by the Government,” he added.

Speaking on the occasion Senior Vice President, JSPL G S Mittal said, “State-controlled miners like Odisha Mining Corporation [OMC] should ramp up production of iron ore, a key ingredient in the manufacture of steel.”

“But to achieve this, the process for regulatory clearances like Environmental Clearance [EC], Forest clearance and sanction of ML/PL to lessees should be made faster. An inter-ministerial committee should provide single window clearances for steel-based projects,” he said.

“Long-term mineral (Iron Ore) linkage to steel industries should be made, be it for 2 or 3 bulk buyers or 40-50 small and medium buyers,” MD OMC Saswat Mishra said.

The Government has to take a call on the pricing of iron ores to make it viable for larger steel manufacturing industries to source the RM from the mining companies in the state, he went on to add.