In this Issue: • Arun Kumar Jagatramka : Black Diamond’ – Poised to Fuel Indian Economy? • Dr.Susmita Dasgupta : Evoluon of Steel Technology in India • Phil Hunt : World Steel Review – December 2014 • M.C.Das : Finance Performance of steel sector in Q-3 • Indian Iron Ore Scenario • Coal Scenario in India • World Steel Stascs • A Review of the Indian Steel Industry • Indian Steel : Stascal Secon • News & Views In this Issue: • Arun Kumar Jagatramka : Black Diamond’ – Poised to Fuel Indian Economy? • Dr.Susmita Dasgupta : Evoluon of Steel Technology in India • Phil Hunt : World Steel Review – December 2014 • M.C.Das : Finance Performance of steel sector in Q-3 • Indian Iron Ore Scenario • Coal Scenario in India • World Steel Stascs • A Review of the Indian Steel Industry • Indian Steel : Stascal Secon • News & Views Advisory Board: Deepak Kumar Agarwal Pawan Tibrewalla Santosh Bajaj The Editors: R. K. Sen M. C. Das Advisory Board: Deepak Kumar Agarwal Pawan Tibrewalla Santosh Bajaj The Editors: R. K. Sen M. C. Das A Quarterly Steel Bullen Published by MCC Chamber of Commerce & Industry since 1999 January March 2015
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Arun Kumar Jagatramka, Chairman & Managing Director
Gujarat NRE Coke Limited
‘Black Diamond’ Poised to Fuel Indian Economy?
India is the third largest importer of coal in the world. It is despite of the fact that our country has one of the largest reserves of coal. This speaks volume of the level of inefficiency, and malpractice that has crept into this sector. Coal has long been the face of thriving corruption in India both as a means as well as an end in itself. It has been intentionally kept messy and a fertile breeding ground of political-business-criminal nexus for decades together, just to benefit a handful. ‘Coalgate’ has been the latest addition to this malice, and is a perfect example of crony capitalism and politician-corporate nexus.
Coalgate did not transpire into any public good other than windfall gains for certain individuals. The 2G scam though involved in giving away the scarce spectrum cheap to private entities by following an apparently malafide procedure, but ultimately, there was a certain benefit associated with it for India and the Indians. The telecom operators in the face of competition had invested the money they would have otherwise supposedly spent on licenses to roll out their networks. This resulted in the cheap availability and easy accessibility of telecom service which many boast as the telecom revolution in India. On the contrary, Coalgate
did neither make power more affordable nor did it make easily available. The beneficiaries of coalgate used the mines available cheap to just increase their asset base which resulted into money spinners having a direct effect on their zooming market capitalisation. Making the matters worse, many of the coal blocks that were generously distributed were not even exploited, denying the country of the precious natural resource for economic and industrial activity.
Looking back, it is evident that Coalgate was a result of selective opening up of the coal sector which was in complete government control for decades. Instead of opening up transparently, procedures were twisted to suit the interest of people in power or close to power. Instead of having a fair and transparent auction, coal mines were given to private parties at a throw away price.
The Honourable Court has rightly described Indian Coal economy as a victim of the “vice of arbitrariness and legal flaws”. The fault lies in the “ill-conceived” Coal Mines Nationalisation Act. I am not one among those who would like to blame Coal India Ltd for India’s coal bemoaning. Coal India Ltd on the other hand has performed well considering the huge constraints under which it operates. It is an uphill task to run a behemoth of the size of Coal India having the multiplicity of complexities associated with it. The mistake has been in our treatment of the Coal Mines Nationalisation Act and the lack of political will and courage of the successive governments to bring in the required amendments which would have brought efficiency in the coal sector. The Act at the time of its formulation did help in consolidation of small unorganised mines into a single entity, thereby increasing safety parameters, safeguarding the miners, stopping rampant illegal mining and making coal mining an organised industry. However, on realising the pitfalls of this act, our law makers took the easier route of introducing captive mining concept, bypassing the hard decision.
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The concept of captive mining is laced with an undue benefit to the captive user, as the allottee gets access to coal at a much cheaper rate than the market rate. The allottee of captive mine is thus at a more advantageous position compared to its peer in the industry and it defeats the concept of level playing field which the government should always present unbiased to all industries. Irrespective of the process of allotment that is followed, the captive policy also does not solve the problem of increasing production. The captive miners though sitting on coal reserves more than their requirement were constrained to not sell coal to the market which continues to starve of this resource and is forced to import. The pitfall of importing is not restricted to the importing company but also to the general economy which is known to all. To add to this, captive mining had led to the development of small and fragmented mines that have not been able to enjoy the economies of scale. Furthermore, process industries may not have the expertise in mining and it should be left to mining companies that excel in this field to ensure that the nation gets full benefits of its vast mineral resources.
The Supreme Court judgement of deallocation of mines and call for a fresh, transparent allocation has come as a lease of new life and an opportunity to revive this sector, which is of great importance to the country’s economy. There were voices raising false alarms of huge coal shortage and the country plunging into darkness as a result of this judgement. The government of the day with its alacrity and efficiency has proved the naysayers wrong. The present government under the dynamic leadership of Shri Narendra Modi should be complimented for taking the Honourable Court’s judgement in its stride and turning it into an opportunity to revive the ailing coal sector. Kudos to the government for moving with speed in announcing a transparent mechanism to allot mines to private players and directly allotting mines to public sector ones.
The government issued an Ordinance, to amend the Coal Mines (Nationalisation) Act, 1973 and the MMDR Act 1957 to set the ball rolling in coal sector reforms.
This shows the government’s resolution to carry on with the development agenda and to act fast in sorting issues quickly. The ordinance has provisions of opening of the sector to private firms for production and sale at a later date, which is a new step. This is very much required and needs to be implemented as its opens the window for giving mine leases to firms that are not in the business of producing power, steel, etc, but specialise in extracting and selling coal. The Ordinance also allows the government to continue with direct allocation of coal mines to public sector enterprises.
Though the government in short span has moved with considerable speed to reform the coal sector, there is however much that remains to be done. The most important among them is opening up coal for commercial mining, which has been pushed to a later date in the ordinance, needs to be implemented fast. The time has come to take the bull by its horn to turnaround the coal sector for the sake of the country’s energy security. The business of coal mining should be opened to pure miners (instead of captive users, whose core competency is not mining) and foreign mining companies need to be encouraged to invest in coal mining, thereby bring with them latest technology for increased productivity and efficiency. Also important is to set up an institutionalised mechanism like an independent coal regulatory body to oversee the activity of mining companies, ensure level playing field for all, and protect the consumer’s interest and check against any violation. However, the role of the regulator should be non-discretionary and hence, a proper regulation/code of conduct is required setting boundaries within which the mining companies can operate. The role of the regulator would come if any company is found in breach of the already set boundary.
Coal, which is better known as “black diamond” need to get its shine back in India through a proper polishing of the policy framework and transparency. It is critical and imperative for a Nation that aspires to fast-track its economic development, ensure energy security and feed it’s over a billion people.
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Dr. Susmita Dasgupta Jt Chief Economist,
Economic Research Unit, Ministry of Steel
Evolution of Steel Technology in India
The modern technology of producing steel on an industrial scale came to India almost at the same time as anywhere else in the modern world, which means in the middle of the 19th century. India was then a British colony and the resident Britishers set up steel producing facilities in order to prove themselves to be as good and if not better than those who were at home. It is interesting to observe that the imperial adventurer and the imperious native of Britain were often in competition with each other; the imperial thought those who stayed back at home as not been masculine enough for adventure while the homebird construed the adventurer as being crude, boorish and all brawn and no brain. It was in a spirit of competition that the imperial servants tried to set up steel making facilities in India. The earliest one was at Porto Novo, off the coast of Madras, now Chennai in the year 1830. This plant produced castings and tubes which were exported to England and wereused to construct the Mennai and Britannia bridges. In 1875, under the aegis of the Maharaja of Mysore, then a princely state, the Bhadravati Steel Plant, an electric steel making route in contrast to the Blast Furnace was set in in in Karnataka. The steel plant was an ensemble of facilities. It used steel scrap to manufacture steel and because it had no blooming mill, used the near net shape casting technology for casting smaller sized ingots, which today would have been known as the pencil ingots. Bhadravati steel plant was an ensemble of facilities with a cast iron pipe plant and a rolling mill. It could produce heavy structural such as the rails. It was the model of steel making that the secondary steel plants were to adopt in the 1980’s. The Bengal Steel Works was set up in Hirapur, once again under the British.
The Tata Iron and Steel Plant set up in 1907 in a village called Sakchi, now renamed as Jamshedpur after its founder, Jamshedji Tata was the first swadeshi venture in India. The principal consultants of the venture were the American metallurgists and hence it laid out its steel plant at the centre of a “city” heralding not merely the start of steel cities in India but also represented the first kind
of planned and modernized city of new India which was to emerge much later in the present century. The idea of the American steel giants was that steel plants would be located near the sources of raw materials and which were often in remote areas. Thus entire facilities for the workers had to be set up in terms of schools for their children, hospitals, temples, entertainment and community services. These were walled and self-contained and centrally governed cities through a professional corporate bureaucracy. The setting up of steel plants in this manner of integration had several uses apart from the proximity to the raw materials and the prime among these were the uninterrupted flow of materials across the iron making, steel making, casting and rolling stages. The uninterrupted flow ensured “self-sufficiency”, a lemma of the swadeshi movement. Also, because the integrated steel plants were very large of scale and emerged with entire cities that housed a professional social class drawn from across the various regions and linguistic groups cutting across caste and religious boundaries, the steel cities became the prototype of the imagined new nation of India. Steel technology was thus never absent from the concerns of the political ideology of what India should look like, self-contained cities, self-sufficient materials for industries and self-reliant technologies. In the large integrated steel mill complex we were thus to model the “temples of modern India.”
It is now well researched and well established that China and India were among the first producers of steel among humanity, the Chinese Blast Furnaces and the Indian crucibles extending to as early as the 4th century BC. The bronze cast figurine of Mohenjodaro indicates that metal casting technology was well developed in India, if it was not an import from China. Metals were used mainly as implements and tools, and later after 1700 BC, as weapons such as arrow heads and swords. India appears to have entered a stagnation at the turn of the 1st century AD because at this time, iron technology becomes rather
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well spread across Central Asia, Anatolia, the Levant, south of Italy, among the Germanaic tribes, the Finns, the Celts and the Turks and the Uruks. Jack Goody traces the role of the pagan cultures and barbaric societies in the development of iron making technologies. Interestingly, it were these rude and often nomadic people who made iron and sold these to settled civilizations and large empires of China and Rome. In India, iron technologies rested too among the forest people, people who lived in caves, often underground, those who we call as the rakshasas. There is also a lohar caste dedicated to the production of iron implements and tools, forged items and even castings in most areas and they form the lower echelons of the Indian society, a clear indication of the wilful domination of knowledge by the Aryan powers of colonization, conquest, forceful displacement and even dispossession and death. The isolation of the tribes who in all probability were the inventors of the Blast Furnace and the suppression of the caste of the iron smiths shows that India did not have the required institutional set up to promote the growth of the iron making technology. This is in sharp contrast to the Han dynasty in China where there Imperial Court promoted iron technology.
Industrial Revolution did not particularly discover the metallurgical principles of iron making, but could achieve a very large scale of production that could manufacture thousands of tonnes of iron in one go. It was the same Blast Furnace used in China since the 4th BC that was blown up in scale by Bessmer of England. Due to this property of attainment of high scale made possible through the redesign and rebuilding of machines of industrial revolution that the founders of India’s industrial revolution thought that machines were the key to attaining of technology. Therefore, the “temples of modern India” went for the outright purchase of machinery from the tried and tested companies and imagined that only by learning to operate the machines in the right way one could internalize the industrial revolution in India. Unfortunately this made India into a technology follower and not a leader. In the business of manufacturing, it is important to be the innovator of technology rather than be a follower; leaders command markets and price premium and the followers are thrown back into the role of forever having to cut costs and reduce margins exerting a downward pressure on wages and ultimately disincentivizing both the entrepreneurs and skilled workers. Unfortunately for India, technology policies have moved around access or outright purchase of commercially proven technologies and which are easy to operate and cheap to maintain.
India is not only an imitator of technology but also an exhibition ground of technologies from across the world. Technology missions in India love to widely source technologies so as never to miss out on anything. Hence, Durgapur Steel Plant was based on British technology, Rourkela Steel Plant was set up with German Technology while the Bhilai and the Bokaro Steel Plants were set up with technology from the USSR. India has always favoured the USSR technology.
A possible reason for this is that both the USA and the USSR perfected the concept of the integrated steel mill complex located within steel cities. Before Independence, TISCO was built out of technology expertise from the USA since India and the USA were “soul mates” of decolonization and multicultural democracy. The possible reason for being attracted to the Soviet, actually the Ukrainian technology was that plant and machinery built out of this technology had large reserve capacities so that production could be increased at will and convenience. Both India and the Soviet Union pursued the Five Year Plans and both preferred plants with surplus and reserve capacities. But this kind of a strategy increased capital costs and the weight of machines. India and USSR had a rupee trade between them and high tonnage meant the outgo of the rupee from India into the Soviet Union.
A survey of Coke Oven technology in India in the past one hundred years reveals that some major developments in coke making developed across the world were totally missed out in India. Indian coke making technologies appeared to be far too much confined to the Russian provider, Giprokok and the plant engineers and workers made all the efforts at learning a system that they had no
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role in inventing in the first place. Giprokok technology was tuned to superior quality of coal and when subsequently technologies developed out of China and Japan could deal with inferior quality of coal, India, too used to and at a comfort level of using the Russian technology refused to change. Tenders were organized in a manner in which no other technology provider could qualify and India persisted with Giprokok because through long use, patent fees dropped and in many cases, rights also expired making it easy for the plant and machinery builders to set up manufacturing facilities.
In the late 1980’s and the 1990’s, environmental norms were raised and soon technologies of steel making were heavily reviewed and redesigned in view of fulfilling the above mentioned norms. Around the same, the finiteness of natural resources and especially of prime quality coal became apparent. There was also a greater use of coal for purposes of generating electricity since oil prices were high. Inferior quality of coal began to be used which threatened to be even more polluting. The management of pollution and the use of inferior coal propelled a whole new set of technologies around the coke oven. The tall flames of inferior coal made Nippon Steel develop the7 metre tall chambers while the higher contents of volatile matters made Sinosteel develop the large sized non recovery coke oven batteries.
There are two paths of coke making; non recovery ovens in which volatile matters in coal are burnt off and heat is recovered from this to feed the power plants. The second route is the by-product plants, a later innovation through which volatile matters are recovered from coal and distilled to yield by products such as tar and benzene which are of industrial value and use. Since the non-recovery coke oven is the conventional mode of coke making, it was not easy for this technology to attain a scale of production. The by-product coke ovens made it possible for industries to attain large capacities because the Coke Oven gaseous emissions were not burnt but retrieved for rich hydrocarbon contents which could be used in the Blast Furnace not only as a source of heat but also of carbon to reduce iron oxides in ores. However, by product coke oven recovery plants despite the large scale of production attained is polluting and this is why, it is suggested that the world returns to the non-recovery ovens. The challenge is now to develop a slew of technologies for the by-product recovery coke oven technologies which can attain the same parameters as the non-recovery ovens and at the same time to expand
the non-recovery ovens to reach scale of operations of by product ovens. Nippon Steel in the former and Sinosteel in the latter are the leaders of technology. Unfortunately, the research and development cells of the SAIL and even of Tata Steel are still involved with testing of coal, acquisition of coal assets and import of coal perhaps to satisfy the raw material specifications of Giprokok.
The story of the Blast Furnace technology is similar. Most technologies around the Blast Furnace appears to have been settled by the mid 1970’s. Indeed, a boost in the Blast Furnace technology came in Europe with decolonization when the colonial powers namely Britain and France no longer could take the access to iron ore in the colonies for granted and the prospect of having to use inferior ore loomed large. It was then experiments began in the Blast Furnaces with ore beneficiation and oxygen enrichment because of inferior ore. By the 1960’s there were important changes in the design which pertained to burden distribution inside the shell and the improvements in top pressures mainly through the bell less tops. In India, during this time, due to the policy of using only technologically tested and commercially proven designs, we imported dated technology instead of trying to be in the wave of innovations in Europe. As a result, India completely lost out on the use of inferior quality of iron ore in the Blast Furnace and instead relied on the excellent ores from Bailadila never imagining that supply of graded ores may soon be over. Indian research and development facilities thus never quite developed to experiment with other accompanying technologies such as improving the coke feed, or increasing the top pressure. What almost never used was non coking coal in the furnace burden. Elsewhere in the world, especially
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in China led by Sino Steel, pellets and directly reduced iron is already being used in the Blast Furnaces. In India, we have increased the sinter burden and use some pellets but the technology remains very much steeped in the earlier century.
Most of Indian attempts at improvements in the Blast Furnace once more pertains to the abilities in operations and there are improvements in sensors, monitoring and testing facilities. Indeed the RDCIS at Ranchi has conceptualized elaborate robotics to monitor the Blast Furnace performance in terms of the composition of hot metals. The main research papers which address issues in the Blast Furnace are often by way of optimization of the old technology of the bell tops, of analysing the impact of various qualities of coal charge into the shell without changing the processes in a major way. The idea of technologies around the Blast Furnace in India is to maintain the status quo of the original design and constantly absorb variations which could have challenged the equilibrium of the original design. This leads to the poor technology and also to poor economics. Indian mentality regarding technology is to cling on to old machines with proven track record not reckoning with the fact that many premises upon which such technologies were conceptualized can change, the prime among them being the quality of raw materials. The Blast Furnace technology in India has been overly concerned with the life of the lining of the shell and also on how to remove the slags out of hot metal. We have a host of standalone facilities which specialize in producing refractories for the lining and also supply standalone slag removing compounds and equipment. Dr D Mukherjee, Chair Professor, Ministry of Steel laments that Indian innovations are mechanical and not metallurgical.
An interesting fall out of the above lacuna manifests itself in the quality issues at the integrated steel plants mainly SAIL and Tata Steel. The high percentage of defectives produced in these mills is because of the problems in the continuous caster. Continuous casting is bad for quality steel if in case the quality of the liquid metal is not up to the mark. Santanu Ray mentions in his paper on the subject that he has diagnosed the material defects as having two origins; large non-metallic inclusions entrapped during steel making and casting and surface or sub surface aberrations and secondly in substandard grade chemistry of steel. Continuous casting, says Ray, can only produce quality steel if and only if the grade chemistry is of standard parameters.
However, India does better in terms of rolling and finishing mills. Indeed, seven out of the nine prime projects awarded by the Ministry of Steel pertain to rolling and finishing of steel products and the production of new grades. The “areas” of intervention often lie in the finishing mills, in the continuous caster, the net shape casters, the pickling and the annealing lines rather than in the steel melting shops or the hot metal stage. This means that India is poor in metallurgy; this is so because so much of time gets taken up in the course of aligning the quality of raw materials to the technology specifications of the plant and machinery bought outright. The innovations in Indian plants are therefore more in the manner of attaining sizes and perfection in surface finishing since almost all of the research and development projects are geared towards these goals.
Steel technology may be imagined in terms of the following broad parameters. There are issues of attaining largeness of scale which involve the ever increasing volumes of blast furnace shells, coke oven chambers, rolling mill widths and so on. There are issues of improving productivity in the manner of lowering down of maintenance costs and power consumption and there are also issues of using less and less of raw materials and labour. While the former may be attained through technologies of pre operations preparations, the latter may be achieved through increased automation. But the technology which takes the lead appear to be those devoted to the management of the environment and ecology. This class of technologies pertain to cleaning of effluents and pollutants and also to recovery of heat from individual stages of steel production to be used in the rest of the steel plants. It is for the last mentioned class of technologies that the model of integrated steel plants has become the preferred solution.
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If we despair at India’s technological retardation and its habit of only being followers than leaders of technology, then let us also mention that we have so far considered only the temples of modern India, namely the large integrated steel plants ensconced in self-contained and walled up steel cities. Outside the “temple” complex among the plebeians of steel industry there existed a medley of producers who were at various stages of steel production. Some were only rolling billets of the larger steel plants into narrower sections for use in the construction of residential buildings. There were some who cold rolled hot coils from the integrated plants to produce cladding materials for roofing, trunks, bus bodies, carts, air coolers, and various kinds of consumer durables and auto bodies. Then there were some who used the electric furnaces to melt steel scrap and cast pencil ingots to fulfil the demands of the rolling mills who expanded capacities and now were facing shortage of supply of billets from the integrated steel plants. As the integrated steel plants modernized they expanded their capacities for rolling and finishing steel mill products and absorbed more and more of their semis within their plants leaving the stand alone smaller rolling mills starved of raw materials. Electric steel furnaces in the 1980s and the induction furnaces in the 1990s filled the gap. Thus there emerged in the secondary steel sector a chaotic unity of diverse players each producing only a part of an integrated steel operations and interestingly it is in the truncated and severed body parts that innovations came to rest in India.
be directly connected to the electric arc melting of steel and the first electric arc furnace to melt steel scrap was set up by Paul Heroult of France who set up a commercial plant in the United States in 1907. In view of this, it is rather interesting to note that the first electric steel plant came up as early as 1922 in Bhadravathi, under the aegis of the Mysore Maharaja. During the World Wars, electric arc furnaces were popular because they could melt scrapped and damaged steel and by adding some alloys produce good quality alloys for use in defence spares and ammunition. It was not before 1969 that the electric steel furnace set up by Nucor in the USA, could actually produce mild steel for use in the construction of residential buildings. Nucor was a model for many of the Indian steel plants in the secondary sector and indeed in the 1980’s when the demand for steel attained a steep curve upwards due to the growing force of urbanization, electric steel making proliferated in India. The costs of investment in an electric arc furnace was only a quarter of that needed for setting up an integrated plant and naturally, India being a capital scarce country found the electric route of steel producing to be far more alluring.
Technologies in the electric arc furnaces in India followed quite the similar trajectory as anywhere else in the world with the Ultra High Power Furnaces, oxy fuel burners, roof burners, water cooled electrode folders and eccentric bottom tapping. However, when the time came in the 1990’s of increasing the size of the furnaces and converting into DC arcs rather than the Ac arcs, it was then that the electric arc furnace segments collapsed in India and there emerged the induction furnaces, even smaller and cruder contraption to melt steel. What also did not become a part of the electric furnace technology map were the post combustion stages like direct input of hot metal, direct exhaust controls, air tight furnaces.
The challenge of electric steel making is the refining of the steel; since the contraption does not have facilities for smelting it cannot, as a matter of its DNA, refine steel. While the whole of Europe struggled to refine steel of phosphorous in the electric furnace within the furnace, the Indians attached a separate ladle refining contraption. The distinct attachment outside the furnace may have compromised on the heat economy but at least this ensured the quality of mild steel from the furnace. Perhaps nowhere in the world has there been such a rapid and prolific adaptation to the ladle furnace as in India. Companies like Siemens, Inductotherm, MegathermTenova and SMS Siemag are the major manufacturers of the ladle furnaces but a digging
Electric steel making once again is an old technology though perhaps not as old as the Blast Furnace for the electric steel making route could not have emerged before the invention of electricity. Sir Humphry Davy appears to
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into the historic calendar of these innovations show that they have come after the innovation of the ladle refining technology in India. These companies have perfected the technology, stabilised it and helped to attain commercial viability.
India seemed to be ahead in the secondary steel making technology till the early 1990’s when the DC arc furnace was innovated in Europe and in the United States of America. It was then that the electric steel making sector needed higher levels of investments and it was then that the raw material feed of scrap was sorted, pressed and pre heated to economise on the furnace parameters and operations. Here the Indians appear to have lost step with the world, sank in and settled for a much smaller scale of steel making in yet another contraption known as the induction furnace, which could produce steel at a fourth of the scale of an electric arc furnace. The induction furnaces were truly the atom scale of steel production. The sizes of induction furnaces could be as small as 5 tonnes and though initially known as a garbage in and a garbage out way of steel making, i.e. only as a simple melting of steel scrap, induction furnaces elsewhere in the world are used for making of stainless steel, silver and gold ingots remelting scrap of respective alloys. In India, induction furnaces actually manufacture mild steel, initially through the use of scrap but later adapted to charge of directly reduced iron. In cases of both the electric arc furnace and the induction furnaces, Indians could not only charge directly reduced iron and pellets but could hot charge the feed as well. Many contraptions like the ladle refining and continuous casters and net shape casters could be attached to these furnaces. The secondary steel makers could not economize too well on energy use and electricity because they never felt the need to do so. Poor laws and poorer regulations on pollution control and therefore a callousness towards heat recovery made the secondary steel producers rather indifferent towards the issue. Only the sponge iron producers, due to the strong public opinion against them created by the civil society activists have attended pollution control. Pollution control and heat recovery go hand in hand and thus, an overwhelming majority among the sponge iron producers have captive power plants in order to utilize the recovered heat.
Major modifications in the induction furnaces have been the change in the refractory lining from basic to acidic, controlled charging, introduction of the external refining
facilities like the Ladle Refining Furnace and the installations of the degassing units. After such modifications, the stand alone induction furnace units have enjoyed higher energy efficiency than the Blast Furnaces. The outstanding performance of the induction furnace industry has seen India as a major exporter of plant and machinery and of technology and installations in countries like Turkey and of Africa and the Middle East. Preet Engineering, a Ghaziabad manufacturer of the induction furnace ensemble plant and machinery is presently exporting and installing machinery to Mexico and to countries of Latin America.
The sponge iron technology also nurtured and nourished in India. Elsewhere in the world, only low grade ore was directly reduced for use in the Blast Furnaces as a means of absorbing the heat and hence control of technology.
In DRI production India deserves special attention, not only because the country is the larges producer of DRI, but also because production is primarily coal based. In india DRI plants can be easily erected with the help of local suppliers, and the investment in a 100 t/d capacity DRI plant can be recovered in 12 to 18 months. “There is a large number of DRI producers in India, and their numbers are continuously increasing.” (http://ietd.iipnetwork.org/content/direct-reduced-iron)) As there is no melting and no slag phase in DRI production, all gangue elements of the iron ores remain in the DRI and need to be separated via a slag in the EAF. This increases the electrical energy consumption of the EAF compared to steel scrap melting. If hot DRI is immediately transferred to the EAF melt shop, the heat from the direct reduction process lowers the cost of melting the DRI in the EAF, significantly cutting these energy costs and electrode consumption (IEA, 2009. p.68)
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Thermal loads for DRI production are mainly linked to the quality of coal and to a lesser degree to the reducibility of iron ore. High proportion (32% on average) of non-combustible constituents (ash and moisture) of the coal commonly used in the Indian DRI plants result in higher specific energy consumption. Typical coal use in Indian DRI plants is in the range of 1.2 to 1.5 t-coal/t-DRI. The coal use in advanced plants is between 1.05 – 1.2 t-coal/t-DRI, which equals 20 – 25 GJ/t-DRI. This is significantly larger than the 15 - 19 GJ/t-DRI value obtained by using coal with 16% non-combustible fraction in South Africa. The counter-current rotary kilns used for DRI production in India only allow about 60% of the heat to be used for reduction, revalorization of the remaining 40% that is discharged from the kiln offers a significant potential for energy efficiency improvements. (IEA, 2007. p. 132-133)
What really does not get addressed is that India attains a very high level of metallization out of its directly reduced iron because it uses very high quality of ore. This explains why it can so easily be used as a feed in electric steel making because of low slag rates. The quality of coal is not poor as well as one observes from the efficient thermal loads. The major modifications in the rotary kiln technology has been the installation of captive power plants in standalone facilities to utilize released energy. Also, of great importance is the small size of the furnaces, a miniaturization that could not be attained elsewhere in the world. While in many parts of the world, the DRI was often integrated with the electric arc furnaces since the start of the hot charging of the DRI, in India, DRI plants were mainly independent and unattached units.
The small scale of investments really helped these units to proliferate and the unity of diversities of DRI plants, induction furnaces and the rolling mills dominated the landscape of Indian steel production, consisting as much as 60% of the total steel produced in India. The growth in capacities among the smaller plants was faster; this was not so much because of the small initial investments but due to the technology leadership in this segment. It is a lemma in manufacturing economics that plants can survive competition if and only if they are technology leaders in the business.
Ideally the role of the State is to act as a traffic police, to create traffic signals that would control players flowing in from diverse directions and often at loggerheads with one another. To the best of my understanding the principles of “control” should now change from the earlier days of caps on capital to positive encouragements on technology growth. By this tenet, the secondary sector should be encouraged to grow and for this, one needs a technology map of the Indian steel industry. The Ministry of Steel has no composition of a technology policy, though it has a R&D Policy which is a lose collection of contingent and abrupt efforts here and there . The R&D policy document observes how India spends too little on its R&D while countries like Japan and China, Germany and Luxembourg do more and how manpower is poorly qualified in India. The policy document does not probe into the consequences of not doing adequate research, does not probe into why organized research bodies like the RDCI&S under SAIL does not quite fulfil the needs of the steel plants in attaining productivity and quality commensurate to those in countries abroad. Also, the document has no understanding whatsoever on why the smaller plants at lower levels of capital and in smaller scales of operations have been the technology leaders in India. The R&D programmes promoted by the Ministry of Steel are mainly operational issues like the reduction of energy use in steel plants, improve the quality of raw materials, development of technologies suited to the indigenous quality of raw materials available in India, coal gasification, synthetic production of coking coal, and various waste management issues. Technologies in these appear to be rather standardized and operational. But globally, among the technology leaders there are efforts at overcoming the problem of coal, by passing carbon totally as the reducing agent and evolving into the electron based or hydrogen based reduction of iron ore, and yet at the same time to recover as much as coke CO2 as is possible from the Blast Furnaces. What lacks in the Indian efforts is an overall plan and a sense of direction. This happens because there is little or no recognition at all of the fact that technologies in India have not taken place through the integrated route as elsewhere but in small and discrete units of a rolling mill or an induction furnace, or a rotary kiln and circulated and universalized through the industry associations.
1Dr D Mukherjee, Development of Capacity and Skill In The Steel Industry In The Eastern Region – An Assessment. JPC Bulletin. November.2014. 2Santanu Ray, Influence of Continuous Casting on Steel Quality. JPC Bulletin. September 2011.3Rathindranath Ray, Steel Making With DRI Through the Induction Furnace Route – An Important Growth Driver. JPC Bulletin 2011. Vol XIX. No 5.
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Phil Hunt International Steel Statistics Bureau
World Steel Review December 2014
The World Steel Association estimated global crude steel production for the full list of 93 countries to be 1661 million tonnes in 2014, just 0.8% up on the annual 2013 total of 1649 million tonnes and the highest total ever. However, China accounted for 50% of this total, and the annual total excluding China actually increased by 1.5% compared to 2013. The EU, North America, the Middle East and Asia all showed a rise in crude steel production in 2014.
European Union
Total crude steel production for the 28 countries of the European Union in December actually fell by 5.7%, although the annual total rose by 1.8% to 169 million tonnes, 10.2% of the world total.Germany made 25% of the EU total at 42.9 million tonnes, which was slightly up on 2013, although the December total was down by 5.8%. Italian steel production dropped by 16.9% in December,
but fell by just 1.4% in the year to 23.7 million tonnes. French December production fell by 6.3%,bringing the year to date total to 16.1 million tonnes, an increase of 2.9%. Spanish steel production decreased by 3.8% in December making the year total 14.2 million tonnes which was just 0.6% lower than in 2013. Steel production in the UK, however, dropped by 34% in December, although the year to date total increased by 1.8% to 12.1 million tonnes. The 12 months total in Poland increased by 8.4% to 8.6 million tonnes, while the Austrian total fell by 1.2% to just under 7.9 million tonnes.
Other Europe
In Turkey, the largest West European steel producer outside the European Union, crude steel production was 34 million tonnes in 2014, a decrease of 1.8% compared to 2013; the December total fell by 6.3%. Steel production in Bosnia-Herzegovina increased by 9.7% in 2014 to 793 thousand tonnes, while Norwegian production fell by 1.6% to 595 thousand tonnes. However, Serbian production rose by 47% in the year to 583 thousand tonnes.European car registrations increased by 4.9% in December 2014 compared to the previous year, according to ACEA and the year total increased by 5.4% to 13 million cars. German registrations increased by 2.9% to 3 million cars in 2014, while the UK total rose by 9.3% to nearly 2.5 million cars. In France, however, registrations increased by just 0.3% to 1.8 million cars, while in Italy registrations were up by 4.2% to nearly 1.4 million cars, Spanish registrations increased by 18.4% to 855 thousand cars. The Belgian total on the other hand fell by 0.6% to 483 thousand cars.
The CIS countries
The countries of the former USSR showed a decrease of 6.3% in crude steel production in December while the annual total was down by 2.8% to 105 million tonnes, 6.3% of world production. Russian steel production rose by 2.6% in both December and in the year to date to nearly
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71 million tonnes making it the sixth largest producer in the world, just behind South Korea. However,Ukrainian December production fell by 28.5% bringing the annual total down 17% to 27.2 million tonnes. Annual steel production in Kazakhstan increased by 12.3% in 2014 to 3.7 million tonnes, while production in Belarus was up 12% to 2.5 million tonnes.
Russian exports of steel in the first 11 months of 2014 rose by 15% compared to 2013 and were slightly above the 2012 total. Half of the exports in 2014 were semis, although the increase in these was only 3.7%. Hot rolled coil exports rose by 6.8% to 3.9 million tonnes, but exports of CR plate and sheet increased by 19.5% to over 1.4 million tonnes. Hot rolled plate exports were up 62.5% to 858 thousand tonnes. Exports of hot rolled bars rose by 64% to 816 thousand tonnes and exports of welded tubes jumped by 183% to 756 thousand tonnes. Russia’s largest market was Turkey which took 4.1 million tonnes, 16.8% of the total exported in 2014. Taiwan was the second largest market at 2.5 million tonnes, 10.2% of the total. The European Union accounted for almost 24% of total exports at 5.8 million tonnes with Belgium the largest importing country followed by Italy. North America imported 3.5 million tonnes from Russia in 2014,14.2% of the total.
North America
North American production accounted for 7.3% of the world’s total, with production in the USA increasing by 1.7% in the year to date to 88 million tonnes, maintaining its position as the third largest steel producer in the world. The US December production showed a 3.7% increase on December 2013. Canadian annual crude steel production was up 2% at 12.6 million tonnes, while the December month total rose by 2.1%. Mexican December production, however, fell by 2.7%, although the year total increased by 4.2% to 19 million tonnes. In Trinidad and Tobago the annual total fell by 21.5% to 483 thousand tonnes, while in Guatemala production was up 2.1% to 393 thousand tonnes.
South America
In South America, crude steel production rose by 3% in December, but fell by 1.4% in the full year to 45 million tonnes, just 2.7% of world production. Brazilian annual steel production was down by 0.7% to 34 million tonnes, while the December total fell 1%. Argentinian steel production, on the other hand, rose by 2.9% in the month, bringing the annual total up by 5.8% to 5.5 million tonnes. Although
Venezuelan production was 48% up in December, the annual total fell by 31.5% to under 1.5 million tonnes. Annual steel production in Chile decreased by 15% to 1.1 million tonnes, while in Colombia it was up by 2.7% to nearly 1.3 million tonnes. In Peru steel production rose by 7% to 1.1 million tonnes.
Africa and the Middle East
Steel production in Africa and the Middle East accounted for 2.7% of the world total. African production decreased by 0.7% to 15.9 million tonnes in 2014, while in the Middle East it rose by 7.7% to 28.5 million tonnes. Iran was the largest producer in the region with production increasing by 5.9% to 16.3 million tonnes, while South Africa’s steel production fell by 0.6% to 7.2 million tonnes. Egypt’s annual total fell by 4% to 6.5 million tonnes, while Saudi Arabian steel production increased by 15% to 6.3 million tonnes. Qatar made 3 million tonnes of steel in 2014, 36% up on the previous year. The UAE total, however, was 17% down at 2.4 million tonnes.
Asia
Crude steel production in the Asian countries increased by 0.8% in the year to over 1.1 million tonnes, 68% of world production. China’s December production was 1.5% higher, bringing the year to date total up by 0.9% to 822.7 million tonnes, the highest annual crude steel production ever.Japan’s annual crude steel production was only 0.1% up in 2014 at 111 million tonnes, while the monthly total decreased by 3.7%. India increased its annual production by 2.3% to 83 million tonnes, only 5 million tonnes less than the USA. South Korean steel production in December was down by 1.6%, but the year to date total increased by 7.5% to 71 million tonnes in 2014. Crude steel production in Taiwan increased by 17.9% in December, and by 4.3% in the year to over 23 million tonnes. Australia’s annual total, on the other hand, decreased by 1.7% to 4.6 million tonnes.
China’s steel exports in December reached 10 million tonnes, the highest total ever recorded,bringing the 2014 year total to almost 93 million tonnes. Exports of hot rolled bars in 2014 more than doubled to 18.4 million tonnes and exports of hot rolled wide strip almost doubled to 13 million tonnes. Rods and bars in coil exports were 11.4 million tonnes, an increase of 42%. Nearly 57% of Chinese steel exports in 2014 went to other Asian countries and a further 10% went to middle eastern countries. North and South America took 15% of Chinese exports in 2014.
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Steel producers in India are passing through a difficult phase and the problems may further aggravate as imports of steel from China has shown a spurt in recent months. The problem of raw materials , particularly iron ore remained critical and de-allocation of coal blocks has added new dimension towards availability of coal to steel producers.
Production for sale of finished steel (Alloy + Non-alloy) in the first nine months( April- December) stood at 65.197 mt, registering a marginal growth of 1.6 p.c. compared to last year. Imports stood at 6.492 mt, a significant growth of 57.5 p.c. compared to last year while exports stood at 4.056 mt in April-December ‘14, with a negative growth of 5.9 p.c. compared and India remained a net importer of steel during April-December 2014. Apparent consumption stood at 48.639 mt, a growth of 1.5 p.c. compared to last year.
Financial Performance during Q-3 (October – December 2014
Financial performance of twenty five companies are given in Table-1.Net Sales of these companies has gone down from Rs.818192 crores in Q-3 of 2013-14 to Rs.777787 crores registering a negative growth of (-) 4.04 p.c.. From profitability point of view , Pat has declined from Rs.20425 crores to Rs.9728 crores registering a significant negative growth of (-) 52.34 p.c. Company wise comparative position is given below in Table-1.
Financial Performance of the Indian Steel Sector in Q-3 (October-December, 2014)
Table 1: Financial Performance in Q-3
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Financial performance in terms of growth in Net Sales and Profit After Tax(PAT) have been analysed in comparison to earlier two quarters, i.e. April- June and July- September and the same is presented below in Table-2.
Table-2 Growth in Net Sales & PAT during Q-1, Q-2 and Q-3
Item Apr-Jun’2014 Jul-Sept’2014 Oct-Dec’12014
Growth in Net Sales
13.7 4.4 (-) 4.64
Growth in PAT (-)21.1 (-)38.9 (-)52.34
It may be seen that Net Sales of these companies taken together was below the level of the previous two quarters which is definitely a cause of concern for the India Inc.
Growth prospects:
The Finance Minister said that based on the new series, estimated GDP growth for 2014-15 is 7.4%, growth in the next financial year is expected to be between 8 to 8.5% and aiming for a double-digit rate seems feasible very soon. Asian Development Bank (ADB) in its latest report said that the Indian economy will grow by 7.8 per cent in 2015-16 on the back of improved performance in industry and services.. However, how the government tackles the following five major challenges faced by the Indian economy is to be seen.
1. agricultural income under stress,
2. weak private sector investment in infrastructure,
3. decline in manufacturing,
4. resource crunch in view of higher devolution in taxes to states and
5. maintaining fiscal discipline.
The Outlook:
Finance Minister Shri Arun Jaitley has said that the Indian Economy has turned around dramatically in the last nine months with the real GDP growth expected to accelerate to 7.4% making India the fastest growing large economy in the world. Presenting the General Budget for the year 2015-16.He said macro-economic stability has been restored and conditions have been created for sustainable poverty elimination, job creation and durable double digit economic growth.
The proposals to increase investment in infrastructure by Rs 700 billion in 2015/16 over last year, setting up of national investment infrastructure fund, tax-free infrastructure bonds for projects in roads, rail and irrigation projects, starting of five “ultra mega” power projects for 4,000MW each are some good news for the steel sector which may help in boosting demand. But at the same time increase in freight rates in coal, iron and steel,iron ore, scrap and pig iron will hit the bottom lines to some extent.
(Views are personal)
Financial Performance of Automobiles Sector in Q-3 (Oct-Dec, 2014)
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Iron OreProduction/Requirement of Iron Ore
Details of the production and reported domestic consumption of iron ore during the year 2011-12 to 2014-15 (upto October, 2014) is as follows:
The mining sector has been liberalized since the year 1993. The demand and supply of minerals including iron ore is driven by the market. The Working Group for 12th Five Year Plan, Planning Commission of India has estimated that the apparent consumption of iron ore may be at 218 million tonnes by 2016-17 at 8% growth rate.
Country-wise details of quantum of iron ore exported during the year 2011-12 to 2014-15 (April-December, 2014) is as follows:
Export of minerals including iron ore is guided by the Export-Import policy of Government. To conserve natural resources and to meet the domestic requirement, duty on export of iron ore has been increased from 20% to 30% ad valorem basis on all grades of iron ore (except pellets) with effect from 30.12.2011. Export duty of 5% has been imposed on iron ore pellets with effect from 27.01.2014.
Production and reported consumption of iron ore in the country (In Million tonnes)
Iron ore 2011-12 2012-13 2013-14 (P)
2014-15 (P) (upto December, 2014)
Production 168.58 136.62 152.43 91Reported Consumption
100.57 103.40 110.50 (E)
NA
Source: Indian Bureau of Mines (P): Provisional, (E): Estimated, NA: Not Available
Country-wise details of export of iron ore (Quantity in Million tonnes)
Other Countries 0.55 0.34 0.41 0.14Total 47.14 18.11 16.30 4.38
Source: Indian Bureau of Mines P: Provisional,R: Revised, ++: Negligible was given by Minister of State Sh. Vishnu Deo Sai in reply to a question Rajya Sabha today
Iron Ore Exported From the Country
Details of production and export of iron ore is shown in Table below year-wise for the last five years. Iron ore exports from India as a percentage of production have fallen from 47% in 2009-10 to 11% in 2013-14.
Mining extraction will be on pro rata basis in Goa - State govt
In a major decision on mining, the state government has decided that the extraction of 20 million tonnes of iron ore would be done on pro-rata basis in 89 mining leases which was renewed by the state government.This means that every lease holder would be allowed a maximum of around 50% of the iron ore extraction as per the EC limit.The state government will approach to the ministry of environment, forest and climate change (MoEF) about the decision to implement a pro rata basis of extraction of iron ore in Goa. The Supreme Court had lifted the ban on mining in Goa in April 2014 following which the state government had lifted its ban on January 16th 2015. For mining operations to now commence, the MoEF has to lift the suspension it had imposed in the state.
According to the present EC limit, mining companies could extract 42 million tonnes of iron ore in 89 mining leases for the entire year, but now that limit has been capped to 20 million tones as fixed by the Supreme Court. The state government had considered three options before taking a decision to allow extraction of mining through pro-rata basis. The other two options before the government was on cluster-basis and capping depending on infrastructure facilities available in different areas.Mining department sources said that the supreme court appointed an expert appraisal committee to study the capping of 20 million tonnes of mining of iron ore in the state and after the committee submits its report, a final decision would be taken by the SC if it has to be revised. The committee is likely to submit the report to the apex court in April this year.
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Before mining came to a halt, Sesa Goa Ltd and Sesa Resources Ltd together exported over 14 million tonnes, Fomento’s Sociedade de Fomento Industrial Pvt Ltd, Prime Mineral Exports Pvt Ltd, Fomento Exports Pvt Ltd, and Infrastructure Logistics Pvt Ltd exported over 7 million tonnes per annum. But as per the pro-rata basis, Sesa would now be allowed to extract 7 million tonnes and Fomento group will be allowed to extract 3.5 million tonnes per annum.Similarly, the new limits for extraction for V M Salgaocar and Bro Pvt Ltd would be 1.40 million tonnes, Chowgule and Co Pvt Ltd limit 1.83 million tonnes, and Pandurang Timblo group around 1 million tonnes.
Source - Times of India
Coal ScenarioStock of Coal Reserves
As per the latest National Inventory on Indian Coal Resources published by Geological Survey of India, the total coal resources assessed in the country stand at 301.56 Billion Tonnes as on 01.04.2014. This was stated by Sh. Piyush Goyal, (Minister of state (I/C) for Power, Coal & New and Renewable Energy in a written reply to a question in the Rajya Sabha today.
State-wise raw coal production during the last five years (Quantity in Million Tonnes)
No foreign company has been given permission to mine coal in India so far. The quantity of coal exported to various countries during 2013-14 (provisional) is given below:
Exploration and proving of coal reserves is an on-going process. The period by which coal will be exhausted also depends on the annual domestic production. With the present condition it is expected that coal reserves will be available for more than 100 years.
Rs. 209740 Crore of Revenue Likely to be Generated from 33 Coal Mines Auctioned - Power Fuel Cost to
Reduce by Rs. 96971 Crore
No allocation of coal mines/blocks has been done through e-auction, previously. Coal mines/blocks of Schedule-II and Schedule-III coal mines have been put to auction as per the provisions of the Coal Mines (Special Provisions) Second Ordinance, 2014. This was stated by Sh. Piyush Goyal, Minister of State (I/C) for Power, Coal & New and Renewable Energy in a written reply to a question in the Lok Sabha today. The auction of coal blocks is an ongoing process and so far biddingfor 33 coal mines/blocks has been completed.The total estimated amount of revenue likely to be generated from 33 coal mines already auctioned isRs. 209740 Crore. In addition, power fuel cost will reduce by approximately Rs.96971 Crore resulting in power tariff savings for consumers, the Minister added.
Coal output target for 2015-16 raised to 700 mt’
The country is targeting to produce 700 million tonnes of coal in the next fiscal year, the Coal Secretary told, in what will be the steepest annual rise as it auctions mines for the first time and state-major Coal India boosts output. However, production this fiscal year ending March 31 may marginally fall short of the 630.25 million target.
Indian coal imports to touch 265 million tonnes in FY’17
Mr Piyush Goyal, Coal Minister, said that a slew of steps like removal of regulatory hurdles are underway to enhance
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India’s coal output in a bid to curb rising imports that may touch 265 million tonnes in 2016-17.Mr Goyal said that “In the 12th Plan projections, the gap between demand and domestic supply in 2016-17 is estimated to be in the range of 185-265 million tonne.” He said that imports touched 168.4 million tonnes in 2013-14 from 28.9 million tonnes in 2005-06. He added that “In order to minimise import deficiency, the focus of the government is on facilitating environment and forest clearances expeditiously, pursuing with state government for assistance in land acquisition and coordinated efforts with railway for movement of coal.”
Coal mines auction: who will hold the Rs.2-lakh cr?
The Centre is in a fix over the Rs. 2-lakh crore mopped up from the auction of 33 coal mines. Even as the Coal Mines Bill is being discussed by a Rajya Sabha Select Committee, it is not clear who will be the custodian of the Rs. 2-lakh crore or how it will be disbursed to the host States. During deliberations of the Select Committee on the Coal Mines (Special Provisions) Bill, 2015, Opposition Parliamentarians repeatedly asked the Centre to spell out how it plans to distribute the money to the States. With just four days left for the Budget session to end (March 20), the Select Committee has been working on a priority basis since March 13 to submit its report by March 18.
According to official sources, the Rules for the Ordinance have a provision dealing with transfer of money to the beneficiaries, but there is no clarity on who will be the custodian. Members of the Select Committee want the Government to take the views of all the States involved before suggesting a framework for allotment of the money to the host States. In its present form, the Bill does not sufficiently address the concerns raised by several States. The Government merely claims that eastern States will benefit from the new Bill. “This (the Bill) will help the coal-bearing States of eastern India which are generally less developed. The primary beneficiaries of this bonanza are the States of Odisha, Chhattisgarh, Jharkhand, Maharashtra and West Bengal,” the Government has been maintaining. “But where are the provisions? We have demanded that the Bill should make it clear that the revenue generated from the auctions will go to States and the process should also be clear in the Bill,” said an Opposition MP.
Time issues
Constrained for time, the government does not want to delay the passage of the Bill. A ruling party member of the Select Committee said they are hopeful that the Bill
will be passed in the Rajya Sabha. “There are some valid suggestions from the Opposition members. But Parliament can address all such concerns,” he said. The Committee is meeting almost daily. One Opposition member said if the Government clarifies their concerns, they will not obstruct the passage of the Bill during the Budget session. “We need clarity on States’ revenues and on the Bill’s capability to check corruption,” he said.
An Ordinance enabled the Government to re-allocate 204 coal mines cancelled by the Supreme Court. The Centre came up with the Coal Mines (Special Provisions) Bill, 2015, to replace the Ordinance, as required under Article 123 of the Constitution. After the approval by the Lok Sabha, the Bill moved to the Rajya Sabha, where it was referred to the Select Committee.
(This article was published on March 15, 2015)
Growth Rates of Coal and Steel Production from January 2014
Govt to issue ownership rights of 15 coal mines on Mar 23
The Government will begin issuing ownership rights on March 23 for the coal blocks that have been auctioned so far by the Government, starting with successful bidders for 15 mines in the first tranche.
As many as 19 mines under Schedule II (already in production) category were auctioned in the first leg held between February 14 and February 22.
However, the Government will decide the fate of four blocks, which came under the scanner for receiving low value bids, after an Inter-Ministerial Committee report.
“Top Coal Ministry officials had a meeting with the Chief Secretaries of coal-bearing states in order to ensure smooth transfer rights, title and interests in the coal mines to successful allottees. Accordingly, vesting orders would be issued on March 23 to successful bidders who grabbed mines in the first tranche of auctions,” an official told PTI.
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The blocks whose ownership rights would be vested to successful bidders on March 23 include Amelia (North), Ardhagram Soya, Belgaon, Bicharpur, Chotia, Gare Palma IV/4, Gare Palma IV/5, Gare Palma IV/7, Kathautia, Mandla North, Sarisatolli, Sial Ghoghri, Talabira — I, Tokisud North and Trans Damodar.
Reliance Cement, GMR Chhattisgarh, Hindalco, Sunflag Iron and Steel, Jaiprakash Associates, Jaiprakash Power Ventures, OCL Iron and Steel, Bharat Aluminium, Essar Power MP, Jindal Power, and UltraTech Cement had bagged these mines.
The four coal blocks whose vesting orders will not be issued now are Gare-Palma-IV/2 and 3, Gare-Palma-IV/1, all in Chhattisgarh and Marki Mangli-III. They were won by Jindal Steel and Power (JSPL), Balco and BS Ispat respectively.
The official said the government is yet to take a call on whether to re-auction these four mines.
“For the Schedule III mines (ready-for-production), the nominated authority will enter into pacts with successful bidders on March 16,” the official said.
Fourteen mines under Schedule III were sold during the second tranche from March 4 to March 9 to firms — Usha Martin, Adani Power, JSW Steel, Mandakini Exploration and Mining, Trimula Industries, Hindalco, Indrajit Power Private Ltd, Jindal Power, GMR Chhattisgarh Energy, Ambuja Cements, Japyee Cement, Araanya Mines Private Ltd, and Monnet Power
The blocks sold in the second tranche included Brinda & Sasai, Jitpur, Moitra, Mandakini, Meral, Dumri, Nerad Malegaon, Tara, Ganeshpur, Gare Palma, Mandla South, Lohari and Utkal C.
The official said vesting order for Schedule III mines would be issued to companies on April 2.
The coal auction kitty has crossed the Rs. two lakh crore mark, surpassing CAG’s estimate of Rs. 1.86 lakh crore lost due to allocating mines without auction during the previous regimes.
Auctions were necessitated after the Supreme Court in September last year cancelled allocations of 204 blocks since 1993, saying their allocation was “arbitrary and illegal”.
(This article was published on March 15, 2015)
Requirement of Coal for Power Sector
In the Annual Plan document of Ministry of Coal for 2014-15, All India Coal Demand of various consuming sectors including power utility and steel plants has been assessed to be 787.03 MT against which supplies from indigenous sources has been planned at 643.75 MT [Coal India Limited (CIL): 520 MT; Singareni Collieries Company Limited (SCCL): 55.50 MT & Others including captive blocks : 68.25 MT] with a gap of 143.28 MT to be met through imports by consuming sectors. This was stated by Sh. Piyush Goyal, (Minister of state (I/C) for Power, Coal & New and Renewable Energy in a written reply to a question in the Rajya Sabha today.
The Minister further stated that for Power Utility sector which includes thermal power plants of State/Central Government as well as Independent Power Producers, the All India coal demand has been assessed to be 551.60 MT against which supply from indigenous sources has been planned to be 466.89 MT (CIL : 405 MT; SCCL : 35 MT & Others : 26.89 MT).
For Steel sector comprising of integrated steel plants of the country, All India coking coal demand has been assessed to be 55.46 MT against which supply from indigenous sources has been planned to be 10.28 MT (CIL : 7.12 MT; SCCL : 0.00 MT & Others : 3.16 MT). Domestic Coal Production during 2012-13 and 2013-14 was as given below:-
Year Production (MT)2012-13 556.402013-14 565.64
Production of Coal from Underground Mines by Coal India
(in million tonnes)
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Direct Reduced Iron:Canada 140 129 122 130 142 120 137 135 108 119 128 140 1 550Mexico 554 489 539 489 487 501 469 524 522 491 431 445 e 5 940Trinidad and Tobago 166 167 189 131 140 82 116 151 122 128 124 128 1 633Argentina 155 149 169 163 158 121 101 101 99 132 157 158 1 665Peru 9 7 9 8 8 6 6 7 7 7 8 8 e 91Venezuela 165 106 79 136 89 109 75 81 148 140 148 140 e 1 415Egypt 269 233 265 262 272 255 247 r 210 138 234 271 226 2 882Libya 87 96 105 105 157 102 110 e 110 e 105 e 110 e 105 e 110 e 1 302South Africa 96 e 85 e 62 e 80 e 85 e 80 e 85 e 85 e 80 e 85 e 80 e 85 e 990Iran 801 1 066 1 287 1 363 1 272 1 240 1 131 1 260 1 335 1 351 1 248 1 200 14 551Qatar 233 212 238 211 236 203 223 228 201 192 148 190 e 2 515Saudi Arabia 421 403 476 329 474 466 481 469 474 494 500 523 5 508United Arab Emirates 156 207 191 303 320 232 98 48 148 242 263 201 2 409India 1 580 1 567 1 644 1 485 1 490 1 474 1 483 1 481 1 499 1 475 1 455 1 434 18 067Total D.R.I. (d) 4 831 4 915 5 374 5 195 5 331 4 990 4 762 4 890 4 986 5 201 5 065 4 988 60 519(a) - steel industry only. e - estimated Year total figures include revisions not shown in the monthly data.(b) - electric pig iron.(c) - the 38 countries included in this table accounted for approximately 99% of total world blast furnace iron production in 2013.(d) - the 14 countries included in this table accounted for approximately 87% of total world direct reduced iron production in 2013.
Annual totals are based on the monthly data, but may include revised data not available on a monthly basis.
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Steelmaking Raw Material & Input Costs
Year/ Month
Therm Coal
$/tonne
Coking Coal
$/tonne
Iron Ore
c/dmtu
Natural Gas
$/BTUm
Steel Scrap
$/tonne
Elect c/KwH
2014 M1 87.4 137.4 128.1 10.9 362 6.96
2014 M2 81.7 137.4 121.4 10.83 365 7.12
2014 M3 78.6 137.4 111.8 10.69 357 6.99
2014 M4 78.0 133.7 114.6 10.79 352 6.75
2014 M5 79.0 133.7 100.6 10.64 362 6.76
2014 M6 76.6 133.7 92.7 10.52 349 7.30
2014 M7 73.7 133.7 96.1 9.40 353 7.49
2014 M8 73.9 NA 92.6 10.38 353 7.38
2014 M9 70.7 NA 82.3 10.40 349 7.22
2014 M10 68.3 NA 80.1 10.40 350e 6.95
2014 M11 67.0 NA 73.1 10.16 350e NA
2014 M12 66.7 NA 68.8 10.45 350e NA
Semi-finished steel prices Billet and slab price data - 2014
Average world fob export prices $/tonne
Date Billet Slab Date Billet Slab
Jan 2014 $527 $499 Jul 2014 $511 $516
Feb 2014 $531 $512 Aug 2014 $500 $510
Mar 2014 $530 $518 Sep 2014 $510 $499
Apr 2014 $519 $525 Oct 2014 $503 $489
May 2014 $517 $518 Nov 2014 $469 $484
Jun 2014 $520 $515 Dec 2014 $456 $444
Price Information
Product definitions are as follows.
• Billet is continuously cast, 120x120mm to 150x150mm square
• Slab is conventional continuous cast slab ~150mm up to ~ 400mm thick
• Both billet and slab are made from commodity carbon steel rather than from alloy or other specialty steel.
All prices are monthly world average f.o.b. export prices expressed in US dollars per metric tonne.
World steel updateWorld crude steel production for the 65 countries reporting to the World Steel Association (was 128 million tonnes (Mt) in February 2015, a 0.6% increase compared to February 2014.
China’s crude steel production for February 2015 was estimated at 65.0 Mt. The total production for January and February 2015 in China has been confirmed at 130.5 Mt. Elsewhere in Asia, Japan produced 8.4 Mt of crude steel in February 2015, a decrease of -0.2% compared to February 2014. South Korea’s crude steel production was 5.1 Mt, down by -4.4% on February 2014.
In the EU, Germany produced 3.5 Mt of crude steel in February 2015, a decrease of -1.6% compared to February 2014. Italy produced 2.0 Mt of crude steel, down by -9.7% on February 2014. France’s crude steel production was 1.3 Mt, a decrease of -1.6% compared to February 2014. Spain produced 1.1 Mt of crude steel, down by -4.4% compared to February 2014. Turkey’s crude steel production for February 2015 was 2.4 Mt, down by -12.2% on February 2014.
In February 2015, Russia produced 5.7 Mt of crude steel, up by 5.6% over February 2014. Ukraine produced 1.6 Mt of crude steel, down by -33.2% compared to the same month 2014. The US produced 6.3 Mt of crude steel in February 2015, a decrease of -7.9% compared to February 2014. Brazil’s crude steel production for February 2015 was 2.7 Mt, up by 2.3% on February 2014.
The crude steel capacity utilisation ratio for the 65 countries in February 2015 was 73.4%. It is -1.7 percentage points lower than February 2014. Compared to January 2015, it is 3.8 percentage points higher.
Source : World Steel Association
S T E E L D IG E S TJ a nua r y - M a r c h 2 0 1 5
2013 Q3 $111.9 2014 Q2 $96.7Table last updated: 10th October 2014
Basic Oxygen Furnace Route Steelmaking Costs 2015
Acknowledgement: steelonthenet.com
Indian Steel ScenarioCrude Steel
• Production of crude steel during April- December ‘14 was at 62.392 million tonnes (mt), a growth of 2.5% compared to April-December ‘13.
• The ISP Producers produced 33.677 mt during this period, which was a growth of 2.5% compared to April- December‘13. The rest 28.715 mt was the contribution of the Mini & Other Producers, with a growth of 2.4% compared to April- December ‘13.
Pig Iron
• Production for sale in April-December ‘14 was 6.081 mt, a growth of 3.6% compared to April-December’13, led by the Mini & Other Producers (5.560 mt), a negative growth of 1.2% compared to April- December’13.
• India was a net exporter of pig iron with exports (385 thousand tonnes) exceeding imports (18 thousand tonnes) in April-December ‘14.
• Stock as on 31-12-2014 stood at 0.087 mt.
• Real consumption (or consumption) during April-December ‘14 was 5.716 mt, up by 11.5% over same period of last year.
Sponge Iron
• Production for sale in April-December‘14 was 13.276 mt, down by 1% compared to April-December’13, led by the Mini & Other Producers (14.170 mt, up by 0.5% over
same period of last year).
• Stock as on 31-12-2014 was 163 thousand tonnes.
• Consumption during April-December‘14 was 13.222 mt, down by 0.8% over same period of last year.
Semis
• Semis for sale were at 23.214 mt in April-December ‘14, down by 20.8% over same period of last year. Contribution by the ISPs was at 16.837 mt and that of Mini & Other Producers was at 28.715 mt in April-December ‘14.
• Export of semis in April-December ‘14 was 332 thousand tonnes.
• Stock as on 31-12-2014 was 0.358 mt.
• Consumption stood at 23.140 mt, a decline of 21.1% over same period of last year.
Bars & Rods
• Production for sale was at 22.899 mt in April-December ‘14, rising of 9.5% over same period of ast year. Production stood at 6.997 mt for the ISPs and at 15.934 mt for Mini & Other Producers in April-December ‘14.
• Exports and imports were respectively at 270 thousand tonnes and 702 thousand tonnes in April- December ‘14.
• Stock as on 31-12-2014 stood at 0.867 mt.
• Consumption during April-December ‘14 was 22.673 mt, a rise of 9% over same period of last year.
Structurals
• Production for sale was at 5.107 mt in April-December ‘14, down by 4.5% over same period of last year. Production stood at 1051 thousand tonnes for the ISPs and at 4.056 mt for Mini & Other Producers in April-December ‘14.
• Exports were at 55 thousand tonnes and imports at 44 thousand tonnes in April-December ‘14.
• Stock as on 31-12-2014 stood at 24 thousand tonnes.
• Consumption was 5.139 mt, a decline of 3.7% over same period of last year.
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HR Coils/Skelp
• Production for sale was at 13.713 mt in April-December ‘14, down by 12.2% over same period of last year after adjusting for own consumption/IPT from gross production of 15.216 mt of the ISPs and 2.744 mt of Mini & Other Producers.
• Exports were at 953 thousand tonnes and imports at 1332 thousand tonnes in April-December ‘14.
• Stock as on 31-12-2014 stood at 0.787 mt.
• Consumption during April-December ‘14 was 7.120 mt, down by 26.6% over same period of last year.
HR Sheets
• Production for sale was at 509 thousand tonnes in April-December ‘14, up by 14.9% over the same period of last year, led primarily by the ISPs.
• Exports were at 36 thousand tonnes and imports at 63 thousand tonnes in April-December ‘14.
• Stock as on 31-12-2014 stood at 50 thousand tonnes.
• Consumption during April-December ‘14 was 499 thousand tonnes, up by 2.7% over same period of last year.
CR Sheets/Coils
• Production for sale was at 6.170 mt in April-December ‘14, a growth of 7.9% over same period of last year after accounting for own consumption/IPT from gross production of 4.086 mt of the
• ISPs and 4.481 mt of Mini & Other Producers.
• Exports were at 418 thousand tonnes and imports at 1.240 mt in April-December ‘14.
• Stock as on 31-12-2014 stood at 0.209 mt.
• Consumption during April-December ‘14 was 3.781 mt, up by 8.2% over same period of last year.
GP/GC Sheets
• Production for sale was at 5.192 mt in April-December ‘14, up by 0.9% over same period of last year. Production stood at 2.317 mt for the ISPs and at 2.875 mt for Mini & Other Producers in April-December ‘14.
• Exports were at 1.219 mt and imports at 332 thousand tonnes in April-December ‘14.
• Stock as on 31-12-2014 stood at 0.195 mt.
• Consumption during April-December ‘14 was 4.318 mt, up by 3.5% over same period of last year.
Total Finished Steel – Non-Alloy + Alloy
• Production for sale stood at 65.197 mt, a growth of 1.6% compared to last year. The contribution of the ISP Producers stood at 33.986 mt (a growth of 1.9%) while the rest (38.180 mt) was the contribution of the Mini & Other Producers, after accounting for IPT/own consumption.
• Imports stood at 6.492 mt, a growth of 57.5% compared to last year while exports stood at 4.056 mt in April-December ‘14, a negative growth of 5.9% compared to last year.
• India was a net importer of steel during April-December 2014.
• Stock as on 31-12-2014 stood at 2.373 mt.
• Consumption stood at 48.639 mt, a growth of 1.5% compared to last year.
GRAND TOTAL 65197 6492 4066 67623 1458 2373 915 55315 54506 1.5
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PRODUCER-WISE & CATEGORY-WISE PRODUCTION FOR SALE OF IRON & STEEL APRIL 2014 - DECEMBER 2014 (2014 - 15) (PROVISIONAL)
(`000 tonnes)
CATEGORY Main Producers Major Producers Mini & Gross Less: IPT Total Total Other Produc /Own Cons Production SAIL TSL RINL ESSAR JSWL JSPL ISP Producers tion umption for Sale
A. PIG IRON 456 0 166 0 164 75 861 5560 6421 340 6081
B. SPONGE IRON (DRI) 0 0 0 641 898 1010 2549 14170 16719 3443 13276
Total (Alloy) (14 to 15) 30 0 0 0 289 0 319 6059 6378 295 6083
GRAND TOTAL 7533 6600 1849 3628 13045 1333 33988 38180 72168 6971 65197
Note:
1. From Apr 2014 onwards the definition of Main & Major Producers will reported as Integrated Steel Plants (ISP) 2. For Statistical purpose all the plants of the ISP Producers are reported under ISP Producers.
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MARKET PRICES ANALYSIS OF SELECTED STEEL PRODUCTS(` / tonne)
Note: 1) All prices are in Rs/Tonne and has been compiled on the basis of
average of Main & Secondary producer’s prices. 2) Prices are inclusive of Excise Duty & Sales/ VAT Tax 3) All prices are as on 15th of every month 4) Prices are indicative.
ITEM MONTH Kolkata Delhi Mumbai Chennai ITEM MONTH Kolkata Delhi Mumbai Chennai
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NEWS & VIEWS
R&D in Steel Sector
Major steel companies like Steel Authority of India Limited (SAIL) and Rashtriya Ispat Nigam Limited (RINL) in the public sector, and Tata Steel Limited, JSW Steel Limited, Essar Steel Limited and Jindal Steel & Power Limited in the private sector are engaged in Research and Development work in the iron and steel sector in the country. The R&D programmes pursued by the companies inter-alia includes R&D in raw materials upgradation; improvement in process/technology, products & productivity; development of new products & improvement in quality; and Improvement in energy consumption & environment management. According to information available from the steel companies, the expenditure incurred on R&D activities during the last three years and the current year are given hereunder:-
(Rs. in crore)
S.l No.
Company R&D Investment2011-12 2012-13 2013-14 2014-15
A new scheme ‘Promotion of R&D in Iron & Steel Sector’ was introduced by the Government in the 11th Five Year Plan which has been continued in the 12th Five Year Plan. A new component has been added in the aforesaid scheme in the 12th Five Year Plan for development of technology for Cold Rolled Grain Oriented (CRGO) electrical steel sheets and other value added innovative steel products.
Steel demand to grow in single digit in India : Moody’s
Steel demand in India will grow in single digit in 2015 buoyed by government’s infrastructure spending, rating agency Moody’s Investor Services said recently(25 February 2015).“Regionally, Moody’s expects flat demand in Korea and Japan, while India will post single-digit demand growth as the new government invigorates infrastructure spending,” it said in its statement.However, Steel demand growth in China would be negatively affected by the slowing domestic economy and weakness in the property market, which is one of the primary end-markets for steel. The sluggish steel demand would impact steel-makers in
Asia because China accounts for approximately 70 per cent of the region’s steel demand, it said. “Indian steel companies — because of import duty and/or captive iron ore supplies — will enjoy the highest profitability among the cohort,” it said.
Govt plans anti-dumping duty on steel imported from China, others
Ministry of Commerce has reportedly recommended anti-dumping duties ranging from $180 to $306 per tonne for some industrial-grade stainless steel imported from China, Malaysia and South Korea in a bid to protect local industry. This has come after a year-long investigation based on complaints from Jindal Stainless. India consumes about 1 million tonne of this type of stainless steel and more than 40 per cent of that is imported, mainly from China, a trade which is growing at up to 15 per cent a year.China’s annual stainless steel surplus is more than 4 million tonnes, compared with India’s annual demand of about 2.6 million tonnes and which leads to cheap supplies coming in from China.Steelmakers from Asia to Europe are facing increasing pressure from a rise in cheap imports as Russia and Ukraine, armed with weaker currencies, join China in pushing surplus output on to world markets.
RINL bestowed with Corporate Vigilance Excellence Award
RINL, the corporate entity of Visakhapatnam Steel Plant was bestowed with the prestigious Corporate Vigilance Excellence Award for promoting transparency in its procedures and bringing awareness in combating corruption in the organization.P Madhusudan, CMD, RINL was the Chief Guest and distributed the vigilance awards at the C onclave of Vigilance Officers organised by Institute of Public Enterprise (IPE), Hyderabad.It is noteworthy to mention that VSP has bagged the corporate award for the 2nd time in a row. Four Vigilance Officers from RINL also received the Individual Vigilance Excellence Award for 2014-15 for their outstanding performance from the chief guest..
WIPS wing of RINL bags national award
P Madhusudan, CMD, RINL accompanied by Dr GBS Prasad, Director (Personnel) and V. Padmavati, Co-ordinator, WIPS and other members received the “Best Enterprise Award” under Maharatna & Navratna category from Ananth Geethe, Hon’ble Union Minister for Major Industries & Public Enterprises in at the 25th national
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NEWS & VIEWS
convention of Forum of Women In Public Sector (WIPS) in association with SCOPE held at Vigyan Bhavan, New Delhi. The award was presented to RINL for their outstanding contribution for the betterment of women employees, particularly in maintaining the harmony and providing safe and green environment at the workplace.
2015 – an year of Opportunities: RINL CMD
P Madhusudan, CMD, RINL highlighted the need to sustain the brand image of Vizag Steel Plant for its quality products not only in the country but abroad and added that the entire Steel Industry in the country is watching the performance of RINL, which is known for its efficiency and committed workforce. He made this observation while addressing senior officers and trade unions on the occasion of New Year 2015 in Ukkunagaram recently.
Vizag Steel bags 5S Par-excellence Award at National level
RINL, the corporate entity of Visakhapatnam Steel Plant bagged the ‘Par-Excellence Award’ for ‘5S implementation’ at the National Conclave held at Madurai on Saturday,22nd November-2014. Dr GBS Prasad, Director(Personnel) RINL received the award during the 2nd National conclave on 5S ( a Japanese concept of Work Place Management) organized by Quality Circle Forum of India(QCFI) in association with the Chennai Chapter and hosts Madurai Chapter.
CII Exim Bank Award Presented to RINL for Business Excellence
Rashtriya Ispat Nigam Limited, the corporate entity of Visakhapatnam Steel Plant has been recognized for “Significant Achievement” in CII-EXIM Bank Award for Business Excellence for its performance in 2013-14. The award was bestowed on RINL for the second consecutive year.P Madhusudan, CMD, RINL along with Sri PC Mohapatra, Director (Projects) and DN Rao, Director (Operations) received the honours at the 22nd CII National Quality Summit held at New Delhi where winners in various categories for CII-EXIM Bank Award for Business Excellence 2014 were announced.
President of India presents Rajbhasha Shield to RINL
Pranab Mukherjee, President of India today presented 3rd prize of Indira Gandhi Rajbhasha Shield to RINL, the corporate entity of Visakhapatnam for effective implementation of Official Language Hindi for the year
2013-14 in the presence of Rajnath Singh, Hon’ble Union Minister for Home Affairs.i P Madhusudan, CMD, RINL received the award at a glittering function held in Delhi.
Indian steel sector loses coal blocks to aluminium and cement plants in auction
Economic times reported that fuel scarcity appears to be looming over the steel sector now with aluminium and cement plants having won most of the coal blocks that were earlier attached to steel plants in the first two rounds of government-held auction.Steel plants, which collectively owned 83% of the coal reserves present in the 31 auctioned blocks, now hold just 32%. Prior to the auctions, the aluminium sector had 1% of the coal reserves; they now own 36%. Coal reserves with cement companies have doubled to 33% from 16% earlier.Experts said that this has happened because the government clubbed three different industries under one category of end-use, called the “unregulated sector”, while power plants, where the output price is regulated, were offered a separate set of mines with different rules.
Environment Ministry clears 39 projects in West Bengal
PTI reported that a spate of investment is likely to take place soon in West Bengal with 38 industrial projects belonging to the Central, state and private sectors are set to take off following clearance from the Environment Ministry.Of the 38 projects, 14 belong to Central PSUs like SAIL, ONGC and NTPC, five to state PSUs and 19 to private sectors.Handing out a list of the projects cleared by the Prakash Javadekar-led Ministry in recent times, Amit Mitra, Finance Minister said that since environment clearance was the last step, these projects are now set to take off.The projects in Central sector includes four exploratory drilling projects of ONGC, three expansion proposals of SAIL, NTPC’s 500 MW thermal power project expansion and a 2,340 MW project of DVC.The Environment Ministry has also cleared state projects including development of some coal blocks and diversion of some tract of forest land for industrial use.
A number of private projects in the steel and mines sectors has also been cleared that include Soya Ispat’s proposed steel plant at Bankura and Rashmi Metaliks’ proposed steel-making unit at Paschim Mednipur. He said that during his meeting with Javadekar, the latter informed that another 5 industrial projects have also been sanctioned but are yet to be formalised.
Source – PTI
For Private Circulation only March 2015
Printed & Published by S. Roy, Asstt. Director General, Data Support : Sukanaya Basu, Asstt. Secretary MCC Chamber of Commerce & Industry
Reference/source : Leading newspapers and magazines, Journals and web portals. Views expressed in the bulletin are entirely personal of the authors. MCCI expressly disclaims any liability due to inaccurate, incomplete information, errors and omissions.
In million tonsIndia became the Third Largest Producer of Crude Steel in February, 2015
Share in Production of Finished Steel (Alloy+Non-alloy) during April-December,2014 Country Jan+ Feb
