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8/8/2019 A K Pandey SAIL Final
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RAW MATERIALS AND TRANSPORTATION ::
STEEL AUTHORITY OF INDIA LIMITED
17th
May2006
ByMr. A.K.Pandey, General Manager
ISSUES AND OUTLOOKISSUES AND OUTLOOK
JOINT INDIA / OECD / IISI WORKSHOP ON STEEL
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1. India: A future growth hub
2. Critical Raw Materials Scenario:
Indian Perspective
3. Critical Infrastructure:
Indian Perspective
4. Key Issues
PRIMARY FOCUS
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World Steel Industry Top Ten
Source: IISI 2005
9
4
8
3
2
S. Korea
47.7 mT
5
6
Italy
29.1 mT
10
Germany
44.5 mT
Ukraine
38.6 mT
7
USA
93.9 mT
Russia66.1 mT
Brazil
31.6 mT
India
38.1mT
1
China349.4 mT
Global crude steel Production: 1130.0million tonnes (mT)
Japan
112.5 mT
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Skilled Human
Resources
Abundant Iron Ore
Government Policy
Huge Potential for Demand
High GDP growth rate of 7% 1 billion population
Low per capita steel consumption of 33kg (World av. 181 kg)
Reserves 23 billion tonnes
Stable currency
Easing of regulations
Strong Banking & judicial
system
Growthfactors
for India
Encouraging trade relations with
ASEAN and other countries
Infrastructure building
Exploring new Energy resources
Indian Potential for Steel
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Approved by Government of India in September 2005
SteelProduction
Imports Exports Consumption
2004-05 38 2 4 36
2019-20 110 6 26 90
Major Emphasis:Critical Input Raw Materials: Iron Ore and Coking CoalInfrastructure facilities like Roads, Railways and Ports.
Focus:Human ResourcesTechnology Research and DevelopmentMarket outlook on prices of steel
Environmental Concerns.
National Steel Policy-2005
Milion Tonnes
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Critical inputs for Steel Production
Iron Ore
Coking Coal
Projected Requirement of Critical inputs
Iron Ore Coking Coal Non Coking Coal
2019-20 190 70 26
2004-05 54 27 13
Raw Materials Requirement
New Additions through BF Route (60%),Electric Arc Furnace (33%), others (7%)
Million Tonnes
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Iron Ore Reserves
Total Reserves about 23 BT (P) Haemetite (11.43 BT) and Magnetite (10.68 BT). High grade haemetite (65%) only 14% of total
reserves.
Iron Ore - Reserve Availability
3985 4014
2651
8897
803
3254
0
1000
2000
3000
4000
5000
60007000
8000
9000
Jharkhand
Orissa Chhattisgarh
Karnataka
Goan Others
Million
Tonnes
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Iron Ore Production
(MillionTo
nnes)
Increase in production driven by export
Chhattisgarh, Karnataka, Jharkhand and Orissa -major share
Iron Ore Production Scenario
0
20
40
60
80
100
120
140
160
1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05
75 8186
99
120
145
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Iron Ore Domestic Consumption
Million
Tonnes
Major consumer SAIL and TISCO - captive mines RINL - NMDC ESSAR, Ispat, Vikram Ispat, JVSL - NMDC & others
Iron Ore Domestic Consumption
0
10
20
30
40
50
60
1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05
44 42 4150
52 54
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Iron Ore Exports
3337
42
48
63
78
0
10
20
30
40
50
60
70
80
90
1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05
MillionTonnes
Exports to China has increased due to surge in demand More than 90% of exports comprise of iron ore fines Low demand of iron ore fines in Indian segment
Iron Ore Exports
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InNumbers
Rapid Growth in Productivity per mines at a CAGR of 10%
Source : IBM, Nagpur
Mine in Operation & Production
0
100
200
300
400
500
600
700
FY 01 FY 02 FY 03 FY 04 FY 05
474
247
474
247
604
242
605
221
638
202
LeaseGranted/Executed
Mines in Operation
Production (In Million
Tonnes)
(Nos)
99.1
120.6
145
80.8 86.2
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ORGANISATION / STATE PRODUCTION
CAPACITY
NMDC
Bailadila (11A,11B,11C),Donimalai, Kumarswamy
22
SAILKiriburu,Meghahatuburu,Bolani,
Barsua,Rajhara,Dalli,Gua,Kalta
25
TISCO
Noamundi,Joda
10
GOA 30
Karnataka,Orissa,Jharkhand 58
Total 145
Present Capacity (Million Tonnes)
Iron Ore Scenario
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Sl.No. Area Mine Expected Capacity(mT/annum)
1. Chhattisgarh Bailadila-10&11A 7.0
2. Chhattisgarh Bailadila-11B 7.0
3. Chhattisgarh Rowghat 14.0
4. Jharkhand Chiria 10.0
5. Orissa Daitari 3.0
6. Orissa Sundergarh 10.0
7. Bellary-Hospet Kumarswami 7.0
8. Bellary-Hospet Ramandrug 10.0
9. Andhra-Pradesh
Ongole Magnetite 3.0
Total 71 MT
Total expected capacity in 2011-12 =215MT(approx.)
New Capacities by 2011-12
Iron ore - Future Perspective
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Domestic requirement 190 mTExports 100 mTTotal Requirement 290 mT
Additional modern mining 200 mT.and beneficiation facility
Likely investments Rs.20000 cr(4.5 B US $)
2019-20
Iron Ore Future Perspective
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Strategies envisaged
Investments plans for idle mining leases.
Speedy renewal of existing mining leases
Grant of new mining leases:
Environmental & Forestry Clearances in fixed timeframe
Incentives for Value addition for iron ore fines.
Encouragement for scientific and large scalemining
Iron Ore Future Perspective
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IRON ORE EXPORTS
Projected iron ore exports 100MT
No appreciable increase in quantum envisaged
Future Policy envisaged
High grade lump to be leveraged for imports of
coking coal or for investment in India.
Maintain balance between exports anddomestic consumption
(2019-20)
Iron Ore Future Perspective
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1. Slow pace of growth of the mineralsector
Time taking procedures in grant of
RP/PL/ML viz-a-viz other countries likeAustralia, Canada etc
2. Review of existing procedures for
granting RP/PL/ML
Delay in obtaining statutory clearances:
Iron Ore Key Issues
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3. Less utilization of iron ore fines in iron
and steel industry.
4. Iron ore resources to be further
established by more exploration.
Iron Ore Key Issues
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In-situ Reserves of Coal in India 246 billion
tonnes at depth of 1200 meters (as on 1.1.2004).
Type of Coal Proved Indicated Inferred Total
Coking 16.4 13.5 2.1 32.0
Non-Coking 75.1 102.7 35.8 213.6
Total 91.5 116.2 37.9 245.6
Billion Tonnes
Majority of reserves lies in the states of Jharkhand(29%) and Orissa (25%).
Coal
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Proven Coking Coal Reserves (as on 1.1.2004) - 16.4 BT
Category of coking coal Proven Reserves in BT
Prime Coking Coal 4.6
Medium Coking Coal 11.3
Blendable/Semi-Coking 0.5
Total 16.4
Coking Coal Indian Scenario
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21.2
19.5
1818.4 18.3
11.811.4
10.7
11.811.1
10
15
20
25
1999-2000 2000-01 2001-02 2002-03 2003-04
Coking Coal declined from 33 MT (99-00) to 29.4 (03-04) Significant proportion of coking coal not suitable for metallurgical
purpose. Production of raw coking coal has fallen Washed coal availability would be much lower.
CokingCoalproduc
tion
Metallurgical
Non-Metallurgical
Coking Coal Indian Scenario
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Proven Non Coking Coal Reserves (as on 1.1.2004) - 75.1 BT
Constitutes 82% of the total coal reserves in India.
271.1 282.8
299.1 311.1331.8
100
1000
1999-2000 2000-01 2001-02 2002-03 2003-04
Non
CokingCoal
production
Quantitatively, no problem faced by Indian Steel Industry. Qualitatively, require high grade of non-coking coal for
sponge iron industry.
Non Coking Coal Indian Scenario
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Requirement of coking coal 70 MT
Likely % available from imports 85%
Strategies envisaged Allotment of new coal blocks to steel industry
Joint Ventures and Equity participation abroad bysteel and coal companies.
Development and Adaption of technologies insynergy with natural resource base (non-cokingcoal).
Investment in beneficiation of coal.
2019-20
Coking Coal Future Perspectives
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Requirement of non coking coal 26 MT
Higher grades of non coking coal will be essential
Strategies envisaged
Priority for steel industry and sponge iron of highergrades of non-coking coal (below 12% ash).
Greater flexibility in-sale of surplus coal.
-Re-allocation of existing unused linkages withCIL
Joint Ventures of Public Sector and Private Sector forlarger investments.
2019-20
Non-Coking Coal Future Perspectives
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Limited proven coking coal reserves in India.
Quality parameters to match to requirementsof Indian steel plants.
Huge dependence on imports.
Beneficiation of low volatile medium cokingcoal (LVMC) for metallurgical purpose.
Promote prospecting and exploration activities
to establish further resources at lower depth.
Coking Coal Key Issues
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Inferior quality of non-coking coal with highcontent of ash percentage.
Availability of high qrade non -coking coalfor sponge iron industry.
Non-Coking Coal Key Issues
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Modes of transport -Roads
-Railways-Ports
Facilitate transportation of Raw Materials, FinishedSteel and other products.
Every tonne of steel production involvestransportation of 4 (four) tonnes of material.
The envisaged addition of 75 million tonnes of steel
production annually implies 300 million tonnes ofadditional traffic
Gain competitive edge both in domestic and overseasmarket.
Transportation
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MT
Traffic for roads, due to steel industry by 2020,would increase by 300%(approx.).
The road network needs would be expanded The steel plants and mines to be integrated with
the national highway development.
* Excludes traffic due to export of iron ore
Roads: Future Perspective
Traffic handled by Road (MT)
34100
277761
177
0
100
200
2004-05 2019-20
RawMaterials*
Finished Steel
Total
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MT
Traffic for railways, for steel industry by 2020, wouldincrease by 300%(approx.).The railway facilities wouldbe expanded substantiallyParticipation by the steel industry in creation of railwayinfrastructure
* Excludes traffic due to export of iron ore
Railways Future perspective
Traffic handled by Railways (MT)
80
230
11 33
91
263
0
100
200
300
2004-05 2019-20
Raw Materials*
Finished Steel
Total
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Bulks to be handled at ports (MT) CAGR
2004-05 2019-20
Import Export Total Import Export Total
Raw
Materials*
19.3 78 97.3 85 100 185 4.4%
Steel 2 4 6 6 26 32 11.8%
Total 21.3 82 103.3 91 126 217 5.1%
* Including iron ore
Port Traffic
Enormous dependency on port infrastructure is foreseen inthe near future.
Steel producers intervention in development of ports and berthfacilities is needed for improving productivity, turn around time,capacity to handle larger vessels and other operationalparameters of efficiency.
Ports - Future Perspective
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Roads
Inadequate road linkages between mines and steel plants.
Railways
Limited Rail linkages between mines and steel plants.
Need for high capacity wagons for improving carrying capacity.
Investments for promoting dedicated rail linkages. Ports
Capacity to hold larger size vessels at the ports.
Development of associated infrastructure like weighment facilities,coal holding facilities.More draft for handling larger size vessels.
Railway network needs to be strengthened for handling high capacityat ports
Transportation - Issues
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India - a dominant economy in 21st century.
Government focused approach and interventions arefacilitating fast track growth.
Synergy in meeting iron ore and coking coal requirements
Iron Ore: Initiatives for simplification of procedures havebegun..
Joint Ventures and Equity participation abroad by steel andcoal companies for augmenting supplies of coking coal.
Investments in beneficiation of non-coking coal as well asestablishing Natural Gas as an alternative source for usage insponge iron industry.
CONCLUSIONS
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THANK YOU