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Cover Story

May 201332

Indian Ferro Alloys Industry : An Overview

erro Alloys are special alloys of iron containing

some additional chemical elements like Mn, Si, CrF C etc. Ferro Alloys are vital additives that are used

in steel making as deoxidants and also as alloying

agents. These are added in steel production not only

for de-oxidation but also for grain size control for

improvement in the mechanical properties of steel.

Depending upon the process of steelmaking and the

type of steel being made, the requirement of different

Ferro Alloys varies widely. The principal function of ferro

alloys addition to steel increases its resistance to corrosion

and oxidation, improve its Hardenability, tensile strength at

high temperature, wear and abrasion resistance with added

carbon and increases other desired properties in the steel such

as creep strength etc. Ferro Alloys are vital inputs for producing

all types of steel and are used as raw material in its in the

production of alloys steel and stainless steel.

Demand Drivers of Ferro Alloys

The demand drivers of ferro alloys

are :Crude steel production

Alloy and special steel production

Stainless steel production

Types of Ferro Alloys

BULK Ferro Alloys

HC Ferro Manganese, MC Ferro

Manganese, LC Ferro Manganese,

S i l ico Manganese , MC S i l icoManganese, Ferro Silicon, HC Ferro

Chrome / Charge Chrome, LC Ferro

Chrome.

NOBLE Ferro Alloys

Ferro Molybdenum, Ferro Vanadium,

Ferro Tungsten, Ferro Si l ico

Magnesium, Ferro Aluminium, Ferro

Silico Zinconium, Ferro Titanium, Ferro

Boron, Ferro Nickel Magnesium etc.

Capacities & Production of Ferro Alloys in India

The Ferro Alloy industry wa

thrown open and liberalized durin

1991-92. As a result, a number of smal

and medium units having transform

rating of 2.5 MVA to 16.5 MVA

emerged in production of Buck Ferro

Alloys, particularly in the states o

Chattisgarh, Madhya Pradesh, Wes

Bengal, Kerala, Pondichery, Goa

Jharkhand and Meghalaya.

C a p a c i t y a d d i t i o n a f t e

liberalization, as on date as estimatedby IFAPA, is about 2,300 MVA which

has resulted an increase in transforme

capacity to about 2,900 MVA and by

tonnage it has crossed 5.15 Mt in 2010-

11 a break up of which is shown below :

Raw Materials

The country has reasonable

reserves of Manganese Ore an

Chromium Ore to meet the requiremen

of Bulk Ferro Alloy industry, if the

Policy of Conversion of minerals by

using beneficiated low grade ores i

followed.

Manganese OreThe Al l- Ind ia reserves o

Manganese ore as per Indian Bureau o

Mines Survey Report of 01.04.2010

(provisional) were :

Reserves : 141.977 Mt

Remaining Resources : 288.003 Mt

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Type of Alloys Capacity (Mt)Production During2010-11 (P) in Mt

CapacityUtilisation (%)

Manganese Alloys

Chromium Alloys

Ferro Silicon

Noble Ferro AlloysTotal

3.16

1.69

0.25

0.055.15

1.70

1.04

0.12

0.032.89

54

62

48

6056

Total Resources : 429.980 Mt

Production of Manganese Ore in

2010-11 was about 2.86 Mt.

Based on IBM's Report of

01.04.2010, the requirement of

Manganese Ore for the Indian Ferro

Alloy industry, will be available

domestically for 20 years (excluding

the Inferred Reserves).

Production of Manganese Ore in

India between 2006-07 and 2010-11are shown below :

YearProduction

(Mt)% Change

2006-07

2007-08

2008-09

2009-10

2010-11 (P)

2.10

2.70

2.80

2.44

2.86

==

28.57

3.70

(-) 12.86

17.21

Exports & Imports of Manganese

Ore by India between 2006-07 and

2010-11 are furnish below in tonnes :

Year Export Import

2006-07

2007-08

2008-09

2009-10

2010-11

157,312

208,372

205,424

289,468

117,963

284,202

686,053

852,198

797,933

1,209,640

Major reserves of Manganese Ore

are of BF grade and OCCURS in

Maharashtra, Odisha, Madhya Pradesh,

Karnataka, Jharkhand and Goa.

Manganese is an essential requisite

for steel production due to its special

capability of sulphur fixing, deoxidizingand good alloying properties.

For production of one tone of ferro

manganese, inputs required are : 2.6

tonnes of manganese ore, 0.5 tonnes of

reductant and 3MWH of electricity.

Silico Manganese is produced by the

reduction of manganese ore, quartzite

and manganese slag with coke.

Stainless steel accounts for about 6

percent of the total production of ferro

manganese and silico manganese in

India. The average consumption of

manganese alloys by India's stainless

steel industry is about 105 kg per

tonne.

But the availability of high grade ore

is limited. Manganese Ore India Ltd.

(MOIL) commands around 50 percent of

the total resources of manganese orerequired by the manganese Ferro Alloy

industry. The industry is facing

problem of in supply of high grade

manganese ore . Due to the

monopolized status, pricing of high

grade manganese ore is controlled by

MOIL. Thus, due to the limited

availability of high grade manganese

ore, the Ferro Alloy Industry is

compelled to source high quality ores

through imports. According to experts,

MOIL's price of manganese ore is

always higher than the ore of the

international suppliers.

Chrome Ore or Chromite

The All-India reserves of Chrome

Ore (ore Chromite) as on 01.04.2010

were as follows :

Reserves : 53.970 Mt

Remaining Resources : 143.376 Mt

Total Resources : 203.346 Mt

Based on the Survey Report of

Indian Bureau of Mines, the

requirement of Chrome Ore will be

available domestically for next 15

years (not including inferred).

Production of Chromite in India

between 2006-07 and 2010-11 areshown below :

Exports and Imports of Chromium

Ore by India between 2006-07 and

2010-11 are presented below in '000

tonnes.

To support the Ferro Chrome

Year

2006-07

2007-08

2008-09

2009-10

2010-11 (P)

Production('000 tonnes)

% Change

5296

4873

4073

3143

4262

==

(-) 7.99

(-) 16.42

(-) 22.83

35.60

Year

2006-07

2007-08

2008-09

2009-10

2010-11

Export Import*

1203

907

1899

689

173

5

121

94

96

86

industry, export of chromium ore

concentrate are being brought dow

over the year. In order to produce thdesired grade of Ferro Chrome and also

to maintain the desired charge mix, the

industry imports lumpy ore to blend

with domestic low grade ore

concentrate. Presently, the industry i

using chrome concentrates to th

extent of 50 percent of the requiremen

per annum.

Supply of Chrome Ore is Erratic

Odisha alone producers over 97

percent of chrome ore in the country

The sole and major supplier of chrome

ore to the country's Ferro chrome

industry is the Orissa MiningCorporation (OMC) which has a contro

over 80 percent of the chrome ore

leases in Odisha. The industry

maintains that proper allocation is no

taking places and the units outside

Odisha are suffering. The supply o

chrome ore is inadequate and the

industry, therefore, depends o

imports.

India is the third highest globa

producer of chrome ore. Chromium ore

or chromite is used mainly in

metallurgical industry for manufactur

of ferro alloys such as Ferro chrome

charge chrome and silico chrome whichare used as additives in making

stainless steel and special alloy steel.

Chromium imports strength

hardness, toughness, magnetism an

offers resistance to abrasion, corrosion

and acts as a deoxident.

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The use of chromium in steelmaking

depends on the end-use purpose. Low

chromium steels with less than 5

percent chromium and small quantities

of nickel is used in the production of

rails, automobiles, armoured plates etc.

I n te rmed ia te ch rom ium s tee l

containing upto 12 percent chromium

along with small quantities of tungsten,

molybdenum or silicon are used in high

speed valves for engines and

equipment which require resistance to

abrasion, corrosion and oxidation. High

chromium steels are stainless and

super stainless steels that are used for

manufacture of cutlery, cooking

utensils, aircrafts, high speed trains

etc.

Raw Materials for Noble Ferro Alloys

For producing Noble Ferro Alloys,

most of the raw materials are procured

indigenously.However, for producing Ferro

Molybdenum, the raw material –

molybdenum ore is imported in full as

the same is not available in India. Steel

industry also directly imports Ferro

Molybdenum – the finished product

instead of ore for their use. According

to experts, some of the Mini Steel

Plants used molybdenum ore directly in

their furnaces.

The raw materials for producing

Ferro Vanadium is Vanadium Pentoxide

which is generally extracted from the

Aluminium Sludge and about 45-50percent of the industry's requirement is

imported in the form of Vanadium

Sludge, Vanadium Concentrates,

Vanadium Compounds and Aluminium

Metavandate.

The total imports of Noble Ferro

Alloys in 2010-11 was 218,401 tonnes.

Major imports were : Ferro Phosphorus

– 1748 tonnes, Ferro Titanium – 1658

tonnes, Ferro Silico Magnesium – 1597

tonnes and Ferro Niobium – 1432

tonnes.

Major Ferro Alloys Producers inIndia

The names, locations and product –

mix of some major Ferro Alloy

producers in India is shown in Table – 1.

New Projects & Expansions

The names of some new Ferro

Alloys projects under planning and

Name of Producer & Location Product – Mix

Ferro Alloy Corporation Ltd., Vijanagram, AP Ferro Manganese, Ferro Chrome

Chadrapur Ferro Alloys Plant, Chandrapur,

Maharashtra, SAILFerro Manganese, Silico Manganese

Universal Ferro & Allied Chemicals Ltd., Bhandara,Maharashtra

Ferro Manganese, Silico ManganeseFerro Silicon

Sandur Manganese & Iron Ore Ltd., Hospet, Karnataka Ferro Manganese, Ferro Chrome

Ispat Alloys Ltd., Balasore, Odisha Ferro Manganese, Ferro Chrome

JCFA Corporation Ltd., Khandelwal Nagar, Maharashtra Ferro Manganese, Ferro Chrome

*Indian Charge Chrome Ltd., Chaudwar, Odisha Charge Chrome, Ferro Chrome

Ferro Alloys Corporation Ltd., Balasore, Odisha Charge Chrome, HC Ferro Chrome

*Indian Metals & Ferro Alloys Ltd., Rayagara, Koraput,

OdishaFerro Chrome, Charge Chrome,

Ferro Silicon

*Tata Steel Ferro Alloys Plant, Bamnipal, Kendhujhar,Odisha

HC Ferro Chrome, Charge Chrome

Tata Steel Ferro Alloys Plant, Rawmet, Odisha

Jindal Ferro Alloys Ltd., Kothavasala, APTata Steel Ferro Alloy Plant, Goda, Odisha

Jindal Stainless Ltd., Raigarh, Chattisgarh

New Chrome Ltd., Raigarh, Chattisgarh

Ferro Chrome Ltd., Odisha

VISL, Bhadravati, Karnataka, SAIL

Nova Bharat Ferro Alloys, Polancha, A.P.

Rohit Ferro Tech Ltd., Bankura, W.B.

MB Ispat Corporation, Burdwar, W.B.

VBC Ferro Alloys, Rudram, Medak, AP

Jeypur Super Ltd., Jeypur, Odisha

HC Ferro Chrome

Ferro ChromeSilico Manganese, Ferro Manganese

Ferro Chrome

Ferro Manganese, Silico Manganese

Ferro Chrome

Ferro Chrome

Ferro Chrome, Silico Manganese

Ferro Chrome



Ferro Chrome

Table – 1 : Names, Locations and Product – Mix of Some Major Ferro AlloyProducers in India

expansion of the existing ones are

mentioned below :

Ideal Resources Ltd. is planning a

105,000 tpy ferro manganese and

75,000 tpy of silico manganese

p r o d u c t i o n p r o j e c t i n t h e

Visakhapatnam district of Andhra

Pradesh at an estimated cost of Rs. 400

million. The project is scheduled for

competition in 2013.

Lanco Industries is building a

10,000 tpy ferro alloy production

project in the Chittoor district of

Andhra Pradesh. The project is likely to

be operational in 2013.Misirlal Mines of Misirlal Jain

Group, has planned a 3 – Phase ferro

chrome manufacturing expansion

project at Pankpal in the Jaipur district

of Odisha. The three phases are likely

to be completed within 36 months from

zero data.

Wook Silicon Alloys has planned

22,000 tpy capacity plant in the Nellore

district of Andhra Pradesh. The projec

is scheduled for commissioning in 18

months from zero date.

L a k s h m i M e t a l l u r g y i

implementing a 32,400 tpy ferro alloy

plant at Renugunta in the Chitto

district of Andhra Pradesh at an

investment of Rs. 340 million.

Mid India Power and Steel Ltd

belonging to Ruch Group is planning

12,000 tpy ferro silicon, 28,500 tpy o

silico manganese and 37,000 tpy o

ferro manganese plant in the Anuppudistrict of M.P.

Padma Iron products is planning

ferro alloy plant by installing a 3 x 9

MVA submerged are furnace a

Maheshpur Village in the Bardhaman

district of West Bengal at a cost of Rs

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600 million. The product – mix are :

55,400 tpy of ferro manganese, 39,600

tpy of silico manganese anmd 19,800

tpy of ferro silicon.

Lanco Industries has planned a

ferro alloy plant in the Chittoor district

of A.P. under Srikalahasti Madal toproduce 25,000 tpy of ferro silicon,

60,000 tpy of silico manganese and

75,000 tpy of ferro manganese.

Some other projects have also

been announced which are yet to get

environmental clearance or are

awaiting equipments to be procured.

Production of Ferro Alloy in India

Production of Ferro Alloys in India

between 2008 – 09 and 2010-11 are

shown in Table – 2.

Despite various constraints, the Indian

Ferro Alloy Industry has recorded a

healthy overall growth in production of

Type of Ferro AlloysProduction During

2010-11 (P) 2009-10 2008-09

A. Bulk Ferro Alloy

HC Ferro Manganese

MC Ferro Manganese

LC Ferro Manganese

Silico Manganese

MC Silico Manganese

LC Silico Manganese

Ferro Silicon

HC Ferro Chrome / Charge Chrome

LC Ferro Chrome

390,000

8,000

6,000

1,250,000

24,000

25,000

117,000

1,030,000

2,000

341,883

8,222

6,018

1,066,485

24,108

25,454

97,682

890,916

2,007

372,286

8,386

5,775

889,334

24,087

22,368

110,742

790,072

1,352

Sub Total (A) 2,852,000 2,462,775 2,224,502

B. Noble Ferro Alloys

Ferro Molybdenum

Ferro Vanadium

Ferro Tungsten

Ferro Silico Magnesium

Ferro Aluminium

Ferro Silico Zirconium

Ferro Titanium

Ferro BoronFerro Nickel Magnesium

3,050

1,500

150

18,500

7,600

120

2,100

90250

2,822

1,389

150

17,132

7,017

120

1,929

90209

2,112

1,501

150

13,460

8,170

37

1,561

83221

Sub Total (B)

Grand Total (A + B)

Growth Percentage (YoY)

33,360

2,885,360

15.70

30,858

2,493,633

10.74

27,235

2,251,737

(-) 6.75

Table – 2 : Production Ferro Alloys in India : 2008-09 to 2010-11 (tonnes)

15.70 percent during 2010-11 over the

previous year.

Export of Ferro Alloy by India

India's exports of ferro alloys

between 2008-09 and 2010-11 are


Imports of Ferro Alloys by IndiaIndia's imports of ferro alloys

between 2008-09 and 2010-11 are


An analysis of the exports and

imports of Ferro Alloys by India shown

in Table – 3 and Table – 4 reveals the

following facts :

The value of exports earning by

the Indian Ferro Alloys industry during

the year 2010-11 at Rs. 133,915.10

million rose by a hefty 223.51 percent

over the previous year's figure of

41,394.46 million.

The share of exports in th

production of Ferro Alloys in 2010-1

has gone upto 77.64 percent in volume

terms over 34.60 percent in the

preceding year.

The excess of foreign exchange

earnings by exports of ferro alloys i2010-11 at Rs. 133,915.10 million ove

an outgo of Rs. 20,337.55 million o

imports during the same year was Rs

113,577.55 million.

The percentage increase in th

import value of ferro alloys during

2010-11 was 34.10 over a negative

growth of 0.88 percent in the preceding

year.

Competitiveness of Indian Ferro Alloys Industry

The competitiveness of the Indian

Ferro Alloys industry among the

leading producing countries is shown in

Table – 5.

It is evident from the above table

that South Africa has the advantageou

availability in respect of ore (Chromium

Ore, Manganese Ore) while India an

the CIS countries have moderate

availability with China, Europe an

Japan have low availability of ore.

In the power segment, all the

countries mentioned in the above tabl

have moderate availability expec

Japan which has low availability.

In respect of reductants, which play

a vital role in the production of ferro

alloys, China and South Africa haveadvantageous availability while India

the CIS countries and Japan ha

moderate availability and Europe ha

low availability.

In logistics, China, the CIS countrie

and Europe have advantageou

availability while India, South Africa

and Japan have moderate availability.

In case of labour, which has

significant share in production cost

India and China have advantageou

availability while the CIS countrie

have moderate availability. South

Africa, Europe and Japan have lowlabour availability. Overall, China ha

the highest position in the vital factor o

ferro alloy production followed by

India, the CIS and South Africa.

Suggestions & Recommendationsof Indian Ferro Alloys Producers

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ProductExports During

2010-11 (P) 2009-10 2008-09

Table – 3 : Exports of Ferro Alloys by India : 2008-09 to 2010-11 (tonnes)

Bulk Ferro Alloys

Ferro Manganese :

Carbon Containing >2% by weight

Other Ferro Manganese

Ferro Silicon Containing >55% of Si

Other Ferro Silicon

Ferro Silico Manganese

Ferro Chromium :

Carbon containing > 4% by weight

Other Ferro Chromium

Charge Chrome

96,953

23,098

44,004

6,007

699,581

1,305,395

547

6

48,640

17,833

16,636

3,471

298,299

466,2189

5,734

==

101,289

20,244

27,939

9,228

300,421

488,700

2,974

1,001

Total (A) 2,175,504 856,882 951,796

Noble Ferro Alloys

Ferro Molybdenum

Ferro Tungsten

Ferro Titanium

Ferro Vanadium

Ferro Niobium

Ferro Phosphorus

Ferro Columbium



Ferro Boron

Ferro Silico Chromium

Others

2,719

15

45

169

1,815

233

46

26

3,988

1

50,475

5,308

1,766

1

5

30

116

11

1

1

3,597

3

==

356

888

3

2

387

192

169

==

24

3,295

2

26

3,303

Total (B)

Grand Total (A + B)

Value (Approx.) Rs. Million

Exports % of Production

64,840

2,240,344

133,915.10

77.64

5,887

8,62,769

41,394,.46

34.60

8,291

9,60,087

68,777.66

42.64

Association for Development ofIndian Ferro Alloy Industry

Electrical Energy (Power) andCustoms Duty

Uniform Electricity tariff should

be made available at internationally

comparable tariff for Ferro Alloy

Industry.

Until a level playing field on power

is given to the Ferro Alloy Industry the

Govt. should increase the Basic Custom

Duty to 7.5 percent from the existing 5

percent except on Ferro Nickel to avoid

cheap imports from other competing

countries. If this cannot be done, the

Govt. should reduce the basic customs

duty on raw materials i.e. ores

(Manganese Ore, Chromium Ore,

Molybdenum Ore) under Chapter – 26

and Vanadium Pentoxide, Vanadium

Sludge, Ammonium Metavandate under

Chapter 28 to NIL for production of

Ferro Alloys to cater to the needs of

core sector steel industry.

The Govt. should devise a

mechanism for making funds available

to the Ferro Alloy Industry at a very low

or NIL interest rate for setting up

Captive Power Plants, which would

have the problem of paucity of capital

as well as reduce the interest burden,

thus bringing the cost of generation of

power to a level at which ferro alloy

production in India will be viable and

sustainable, considering the break –

even FOB cost of the product from

other competing countries.The industry should be allowed to

have a higher rate of depreciation (30

percent) for its Captive Power Plants.

This would provide the necessary tax

shield and enhance the attractiveness

of the project.

Electricity Act, 2003 has allowed

Ferro Alloy Industry, to set up to

Captive Power Plants. The industry

transmit this power to individua

members' unit(s) without payment o

any surcharge and be charged only fo

wheeling and transmission, at a low an

reasonable rate. And they should be

given captive Coal Blocks to do thei

own mining to bring down its cost.

The Ferro Alloy Industry shoul

be exempted from paying Electricity

Duty on exports of Ferro Alloys as wel

as on the electricity generation fo

captive requirement and usage.

Ores and Mining

The idle Manganese and Chrome

Ore bearing areas, reserved for PSUS

need to be de-reserved. The Govt

should hand over the same for minera

exportation to private parties with

requisite expertise. The Govt. shouldinitiate a comprehensive fast track

programme like Aerial Survey to look

into the potential deposits particularly

the Chrome Ore and Manganese Ore

deposits. The idle leases and new

leases of these ores need to be allotted

to Ferro Alloy producers.

Considering the projecte

increase in carbon and stainless stee

production in future, it is suggested t

conserve the ore for domestic use. It i

also suggested that exploratory survey

for deposits below 100 meter depth are

intensified.Agglomerates, being consistent i

size and have uniform chemica

composition, are better than lump ore in

their reducibility and therefore, the use

of agglomerates lowers the specifi

power consumption, as well as helps to

attain smooth furnace operation. There

is scope to implement the scheme o

utilizing more and more agglomerated

feed in the manufacture of Chrome an

Manganese Ferro Alloys. Since pellet

have an advantage over briquettes

pelletisation process has to be

eventually introduced by the India

plants to reduce their costs by bringindown the specific power consumption

There is a need for suppliers to offe

lower cos t sma l l e r capac i ty

Pelletisation Plants, considering th

small and medium size furnaces in use.

Government should sponso

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ProductImports During

2010-11 (P) 2009-10 2008-09

Bulk Ferro Alloys

Ferro Manganese :

Carbon Containing >2% by weightOther Ferro Manganese

Ferro Silicon Containing >55% of Si

Other Ferro Silicon

Ferro Silico Manganese

Ferro Chromium :

Carbon containing > 4% by weight

Other Ferro Chromium

Charge Chrome

Total (A) 200,582 172,843 117,372

Noble Ferro Alloys

Ferro Silico Chromium

Ferro Molybdenum

Ferro Tungsten

Ferro Titanium

Ferro Vanadium

Ferro Niobium

Ferro Phosphorus




Ferro Boron

Others

Table – 4 : Imports of Ferro Alloys by India : 2008-09 to 2010-11 (tonnes)

17,482

21,447

119,702

15,394

1,642

6,344

16,068

2,503

9,292

19,312

111,243

13,895

1,377

3,706

13,518

500

6,012

15,996

58,703

24,048

239

3,346

9,028

==

16

963

721,658

891

1,432

1,748

==

238

1,597

429

8775

6

1,111

201,843

881

769

1,138

4

189

1,523

263

7,363

==

840

45558

242

1,779

1,336

10

115

3,833

198

6,420

Total (B)

Grand Total (A + B)

Total Value : Rs. Million

17,819

218,401

20,337.55

15,110

187,953

15,155.36

15,376

132,748

15,299.80

% Increase in Import Value

Import Duty

34.10 (-) 0.88 40.44

5% 5% 0%

Country

China

India

CIS

South Africa

EuropeJapan

ORE

1

2

2

3

11

Power

2

2

2

2

21

Reductants

3

2

2

3

12

Logistics

3

2

3

2

32

Labour

3

3

2

1

11

Overall

12

11

11

11

87

Table – 5 : Competitiveness of Indian Ferro Alloy Industry vis-à-vis Other LeadingFerro Alloy Producing Countries

research in collaboration with the Ferr

Alloy industry for beneficiation of low

grade Manganese Ores with high

Fecontent – suitable for Manganes

Ores found in Eastern India.

Mines in the country are nationa

property. Therefore, the Govt. need toinstruct the state – owned Oriss

Mining Corporation (OMC), to supply

chromium ores on equal proportion t

all the manufacturers of Ferro Chrome

i n t h e c oun t ry w i t h ou t a n y

discrimination. Preferences should b

discouraged.

Coal / Coke

To allocate coal linkage as well a

coal mines to the power plants of Ferro

Alloy industry as captive mines.

The Anthracite Coal Custom

Duty should be brought down to NIL

from existing level of 5 percent basi

duty.

Contribution of the Indian Ferro Alloy Industry to Indian Economy

The contribution of the Indian Ferr

Alloy industry to the Indian economy

are mentioned below :

A Valuable Foreign Exchange Earner

India is a major Ferro Alloy exporte

and Ferro Alloy exports area a majo

Foreign Exchange earner.

Foreign exchange earned by Ferr

Alloy industry by export of Ferro

Alloys between 2006-07 and 2010-1

are mentioned below :Year

2006-07

2007-08

2008-09

2009-10

2010-11

Value (US $ Million)

364

1118

1547

880

2946

Earnings of Ferro Alloy IndustryPloughed Back to Society

The industry has re-investe

profits into setting up captive powe

plants, acquiring Coal Mines, Ore Mine

and spending a huge amount on SociaDevelopment by setting up residentia

complexes, schools, colleges and

hospitals etc., which has created

additional jobs for the people in th

remote areas in the states of Odisha

Karnataka, West Bengal, Chattisgarh

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Kerala and Andhra Pradesh where

Ferro Alloy industries are located.

Electricity Generation

Surplus of electricity generated by

the Ferro Alloy industry through

Captive Power Plants is also supplied to

the Grid, thus increasing the availabilityof power in India.

Although the generation costs for

power is not high, the industry pays a

high tariff due to CROSS SUB

SPIZATION to Agriculture Sector, Low

Plant Load and high transmission and

distribution loses. The Ferro Alloy

units have to maintain a minimum

demand of 85 percent of power in their

operation. This clearly shows that the

industry has paid much more than the

normal power tariff applicable for this

industry, which provided substantial

revenue to the State and Central

Governments.

Industrailisation of Eastern andSouthern Region

Setting up of Ferro Alloy Plants has

helped in the growth of industrialization

of the states of Odisha, West Bengal in

the Eastern Region as well as of Andhra

Pradesh and Kerala in the Southern

Region.

Employment to People

It is estimated that a 50,000 tpy

capacity Ferro Alloy plant supports the

livelihood of about 750 families around

the plants which are usually located in

very remote areas where there is noother major source of employment.

Constraints Faced by the IndianFerro Alloy Industry

High Cost of Grid Power

Electricity cost accounts for 40-70

percent of the total cost of production,

depending on the Ferro Alloy produced.

While the tariff on electricity in other

countries is a 1-5 cents / kwh, the same

in India is as high as 5-11 cents / Kwh.

Though raw material availability is

insufficient, the industry has highly

skilled manpower, latest technology,

which has given their recognition in theglobal market but they are being priced

out primarily due to the high cost of

electricity. The industry has been

demanding for a level playing field by

the Govt. by supplying power at

internationally comparable tariff to the

highly power intensive Ferro Alloy

Industry.

High Raw Material & Input Cost –Non – Availability of High Grade Ore

Manganese Ore

High Grade Manganese Ore ismainly produced by Manganese Ore

(India) Ltd. (MOIL) which commands

about 50 percent of the total vital

manganese ore required by the

Manganese Alloy industry. The

inadequate supply of high grade ore

from MOIL is causing problems for the

industry. Also, MOIL's price of

manganese ore is always higher than

the price of imported ore. Due to the

limited availability of high grade

Manganese Ore, the industry is

compelled to source Manganese Ore

through imports.

Chrome Ore

Chrome ore is a key and vital input

for production of Chrome Alloys.

Orissa Mining Corporation – an Odisha

state own industry is the only one major

supplier of Chrome Ore in the country.

Some Ferro Chrome units have Captive

Mines but they are not able to produce

the quality required for producing

Chrome Alloys. Hence, Ferro Chrome

producers, including those having

captive mines, are importing lumpy

Chrome Ore for blending with domestic

are for production of Chrome Alloys.

The industry has started consumingChrome concentrates of around 50

percent, at almost international price.

The Ferro Alloy industry, is also

facing the following problems :

Increase in Road and Railway

freight

High Finance Cost

Shortage and irregular supply o

railway wagons

Poor port facilities

Free Trade Agreement (FTAs

with many countries which has caused

reduction of Customs Duty or its totaexemption.

Increase in imports. The tota

outgo of foreign exchange ha

increased to Rs. 69,495 million

between 2006-07 and 2010-11. Thi

could have been avoided if the tota

requirement, at least its lion's share

were procured domestic production by

utilizing the idle capacity of Indian

Ferro Alloy industry.

Conclusion

The Indian Ferro Alloy industry ha

already invested over Rs. 60,000

million on capital goods, by way of planand machinery, employing lakhs o

people, directly or indirectly. The

present capacity of the Indian Ferr

Alloy industry, can comfortably cater t

the requirement of present domesti

steel industry to produce 120 million

tonnes.

Ferro Alloy is a power intensiv

industry. The cost of power in India i

almost double of that in other countries

The industry is demanding a leve

playing field for supply of power a

internationally comparable tariff.

The supply of Manganese Ore and

Chrome Ore from MOIL and OMC

respectively, is inadequate and the

quality is often not of high grade. Thi

is compelling the Ferro Alloy producer

to resort to imports causing

considerable outgo of valuable foreign

exchange.

The Govt. should conside

productively the suggestions an

recommendation of the Indian Ferr

Alloy Producers' Association and help

the industry to attain greater heights in

future.

Acknowledgement

Article by T. S. SudaresanSecretary General, Indian Ferro Alloy

Producers' Association, published in

JPC's Performance Review, Iron &

Steel, 2010-11.

Documents

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