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
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.
More Views on News
Aug 22, 2017
Hindalco Industries has reported a healthy growth in the topline on the back of Higher volume and realisation for both Aluminium and Copper segments. However, the bottomline declined marginally primarily on the back a provision of Rs 1.04 billion.
Feb 22, 2017
Hindalco Industries has reported a 14.5% YoY increase in the topline while the bottomline came at Rs 3.2 billion.
Dec 21, 2016
SAIL has reported a 21.4% YoY increase in the topline while the bottomline reported a loss of Rs 7.31 billion.
Dec 19, 2016
Tata Steel has reported a 0.1% increase in the topline while the bottomline was in red in 2QFY17.
Nov 30, 2016
Hindalco Industries has reported a 1.1% YoY increase in the topline while the bottomline has accelerated by 255.4% YoY.
More Views on News
Aug 17, 2017
A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.
Aug 21, 2017
Most Indians who cannot find jobs, look at becoming self-employed.
Aug 16, 2017
The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?
Aug 22, 2017
Post demonetisation, a cut in bank savings deposits rates was in the offing.
Aug 16, 2017
Ensure your financial Independence, and pledge to start the journey towards financial freedom today!
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407