pelletization scenario in india
TRANSCRIPT
OreTeam Iron Ore Pellet Conference
26 March 2012
Pelletization: Here Lies The Future
Gouranga Sen Salva Report Source: Public domain
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1947 1951 1955 1959 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007 2011
Crude Steel Production in India
Milestones of Indian Steel Industry
1948: New Industrial Policy
1952-70: Govt. built large ISPs Licensing of capacity
Dual Pricing System
Quantitative restrictions High tariff barriers
1976-1990: Slow economic
growth
1991: Economic Liberalization starts
Abolition of licensing for steel capacity expansion
1992: Deregulation of pricing & distribution of steel
Automatic approval of FDI up to 51%
4 Policy reforms were instrumental for the growth of Indian steel industry
Source: WSA, Salva Report
India – Climbing Higher
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Top 10 Steel Producers in World - 2004 (Mt)
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Top 10 Steel Producers in World - 2011 (Mt)
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Top 10 Iron Ore Producing Countries - 2010 (Mt)
9th 4th
Iron ore owners are the top steel producers as well
Source: WSA, Salva Report
Indian Iron Ore – Production Meeting Consumption
6 We are efficiently feeding China
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Indian Iron Ore - Production Meeting Consumption (Mt)
Production Consuption Surplus
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Growing Production of Iron Ore in India (Mt)
Lumps Fines Concentrate
Source: IBM, Salva Report
Export Demand Encouraging More Fines Generation
7 Availability of high grade lumpy ore is falling, while stocks of low grade
ore is piling up which have no market
8%
16%
21%
13%
30%
11%
1%
Grade-wise Share of Iron Ore Production - FY06-07
Lumps <= 62% Fe
Lumps 62-65% Fe
Lumps >= 65%
Fines <= 62% Fe
Fines 62-65% Fe
Fines >= 65%
Concentrates
9%
18%
15%
20%
28%
10%
0%
Grade-wise Share of Iron Ore Production - FY09-10
Lumps <= 62% Fe
Lumps 62-65% Fe
Lumps >= 65%
Fines <= 62% Fe
Fines 62-65% Fe
Fines >= 65%
Concentrates
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FY06-07 FY09-10
End of Year Mine-head Stocks of Iron Ore (Mt)
Concentrates
Fines >= 65%
Fines 62-65% Fe
Fines <= 62% Fe
Lumps >= 65%
Lumps 62-65% Fe
Lumps <= 62% Fe Source: IBM, Salva Report
Here Comes Pelletization
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Sponge iron producers struggling to source sized ore, while pig iron
producers facing high price of lump ore
Stock piles of iron ore fines creating environmental hazards
Wastage of natural resources & opportunity cost to national exchequer
Iron Ore Pellets Vs. Sinter
High Tumbling Index & Low Abrasion Index
No Disintegration during handling, maintains uniform in size and Shape
Cannot be contaminated with granite during transportation
Increased campaign life of Kiln to ~60% & reduced refractory repairing cost to 50%
Only 5% fines in the finished product instead of 25 to 45% in case of lump ore
Pelletization is the need for today
Pellets: Always Fetch Value from Addition
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Pellets export: Lowest in quantity but highest in value
Higher realization should thrive for more pellet exports
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Export Quantity of Iron Ore (Mt)
Lumps >=60% Fe Lumps <60% Fe Fines >=62% Fe
Fines <62% Fe Pellets
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2,000
4,000
6,000
8,000
Export Value of Iron Ore (INR/t)
Lumps >=60% Fe Lumps <60% Fe Fines >=62% Fe
Fines <62% Fe Pellets
Source: Ministry of Commerce, Salva Report
Current Scenario of Pelletization in India
10 Clear message from Govt. – ‘Add Value’
India: 4th largest in I/O production, but
7th in pellet capacity
Present capacity ~25 Mt with
production around 16 Mt
Capacity concentrated only in the
handful of large producers
Mostly consumed for captive purposes
with KIOCL being the only major
merchant pellet producers
Attracts 0% export duty vs. 30% on
lumps & fines
Has huge domestic demand and export
opportunity to China, Japan & ME
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Operating Pellet Capacity & Production in India (Mt)
Capacity Production
Source: Salva Report
Future Scenario of Pelletization in India
11 Under-delivery of promises – becoming structural issue in India
Most of the projects coming up for
captive usage only
Out of 55 project proposed to build
new pellet plants with 107 Mtpa
capacity, only 11 projects with 26
Mtpa capacity have visibility of being
completed in 2-3 years
Rest are either delayed or still in the
planning stage or don’t have any
update at all
Announced, 81
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Under Implementat
ion, 26
Pellet Plant Expansion Plans (Mt)
Essar Steel JSW Steel Tata Steel
Brahmani River Others
Source: Salva Report
Problem Areas
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Reasons behind project delays
• Land acquisition & statutory clearances
• Project financing
• Iron ore availability
• Water availability
Technological bottlenecks
• Unsuitability for Indian iron ore
• Size issue
Apprehensions about continuous availability of iron ore with consistent quality
Lack of R&D
Unpredictable behaviour of government
Solutions
13 Can we create another ‘SIIL’ for pellets to make another history?
Sponge Iron India Ltd (SIIL) was established in 1975 as a demonstration sponge iron plant to establish the techno- economic feasibility of producing Sponge Iron from lump iron ore and 100% non-coking coal. The Plant was designed both for production of sponge iron and for R&D work. The plant has not only established the viability of the technology but has also paved the way for the development of sponge iron industry in the country. Today India is No.1 sponge iron producer in the world.
Government to continue supports for pelletization
Joint development of pellet plants
Mandatory value addition to iron ore
PPP model in R&D
Thank You
Source: Public domain
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