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Iron Ore: Challenging times ahead-II - Views on News from Equitymaster
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  • Sep 14, 2011

    Iron Ore: Challenging times ahead-II

    In the previous article we discussed various challenges facing the Indian steel industry with regards to iron ore sourcing. In this article, we will tell you how Indian steel companies are trying to overcome this problem with the help of technology.

    Iron ore is typically classified as High grade, Medium grade and Low grade. High grade iron ore constitute less than 10% of India's total reserves. Limited reserves of high grade iron ore pose a great challenge in long term sustainability of Indian iron and steel industry. In order to ensure optimum use of existing iron ore resources with special emphasis on conservation of high grade ores, there is a pressing need to utilize existing low grade iron ores which are stockpiled in millions of tonnes in different mine heads. The solution lies in beneficiation and pelletisation.

    What is Beneficiation?

    Very low grade Iron ore cannot be used in steel making plants and needs to be upgraded to increase the iron content. A process adopted to upgrade ore is called Beneficiation. Iron ore is upgraded to higher iron content through concentration.

    What is Pelletisation?

    Once the iron ore is upgraded to higher iron content through concentration. Then it must be pelletised in order to feed a blast furnace or a Direct Reduced Iron (DRI) plant. This process is called pelletisation.

    Advantages of using iron ore pellets

    • Easy handling and transportation as pellets do not break down easily

    • Specific consumption of coal will come down by 10%

    • Conservation of iron ore reserves

    • Lower maintenance cost and power consumption

    • Better environment conditions as pellet plants are virtually pollution free

    • High blast furnace productivity

    Looking at various advantages of beneficiation and pelletisation, major steel manufacturing companies in the country are investing heavily in this technology. The table below shows total capacity addition by top steel producers in pellet plants by 2012.

    Pellet Plant Capacity Addition by 2012
    Company Existing Capacity (MTPA) Capacity Addition (MTPA) Total Capacity (MTPA)
    SAIL 0 8.05 8.05
    JSPL 5 10 15
    Tata Steel 0 6 6
    JSW Steel 9.20 4.20 13.40
    Essar Steel 8 12 20

    The Central Government has now decided to give priority in iron ore mine allocation to steel companies that manufacture iron ore pellets. India is likely to develop a steel making capacity of 150 million tonnes per annum (MTPA) by the year 2020. Since good iron ore deposits are depleting fast, beneficiation technologies will have to be adopted to meet iron ore demand.

    Nearly all the steel companies are now embracing this technology and the investment in beneficiation and pellet plants is expected to go up to Rs 80 bn in the next four years.

    Iron Ore Challenging times ahead Series - Previous | All Articles



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