RAW MATERIAL ISSUES
9 Total Projected Demand for Mn Ore
in 12th Plan=7+8 4032 4528 4982 5565 6177 6820 Mn Ore for Domestic Consumption 2477 2963 3408 3981 4576 5193
Mn Ore for Export Production of Ferro Alloys
1555 1565 1574 1584 1601 1627
Table – 4.17
Projected Production and Demand of Manganese Ore During 12th Five Year Plan
(Thousand Tonnes) Manganese Ore 2011- 12 2012- 13 2013- 14 2014- 15 2015- 16 2016- 17 Production 3000 3210 3430 3670 3930 4200 Demand 4031 4528 4983 5565 6177 6819
Gap between Supply and Demand
1031 1318 1553 1895 2247 2619
4.5.8 Beneficiation of Manganese Ore
4.5.8.1 Depleting reserves of high grade ores and stringent environmental constraints pose considerable challenges to the future of supply of manganese
77 ore/alloys to the steel industry. There is a need to develop efficient processes for beneficiation of low/medium grade ores and run of mine manganese ores to high grade/high value products. This is more so in case of silicate ores (as opposed to oxides) which cannot be separated economically by normal gravity and magnetic separation processes. In case of ferruginous Mn ore, beneficiation technique requires reduction roasting and magnetic separation. Again sintering and agglomeration process is required which is very expensive.
4.5.9 Development and Policy Recommendations for Manganese Ore
4.5.9.1 The major recommendations are as below:
Manganese ore production will have to be raised to fully meet the domestic demand by enhancing output from the existing mines and by opening additional virgin deposits. The industry can raise supply of manganese ores by acquiring mines overseas.
i) Focused attention is needed to ensure higher rate of recovery of manganese and improve the quality of the ores by engaging beneficiation and sintering processes.
ii) Geological Survey of India (GSI) may undertake extensive drilling to identify new ore deposits in higher depths. Deep-sea nodules can be a potential resource for manganese in the future.
iii) Renewal of mining leases and grant of new leases can be expedited by a single window clearance system especially in respect of obtaining environment and forest clearances
iv) Infrastructure development, such as railways, roads and ports, linking the mining areas to the consumption areas and export markets may be taken on priority basis so that the overall transportation costs are lowered.
v) Since the manganese ore is not widely traded and there is no benchmark price domestically available, it is recommended that a third party and neutral e- market portal may be developed. The industry, both the ore producers and the ore consumers such as ferro-alloys and the steel may together support such a venture.
vi) With technological advancement, the specific consumption rate of manganese in steel making has reduced from 46 kg per tonne to as low as 30 kg per tonne. There is a need for development of techno-commercially viable value added intermediates for exports like beneficiated manganese ore agglomerates such as sinter and pellets.
vii) R & D is required for reclamation of old mined out areas, and to ascertain the impact of manganese mining on the ecology (air and water).
4.6.0 Chrome Ore
4.6.1 Chromite is the only economic source of chromium. It has a wide range of use in metallurgical, chemical, refractories industries. The properties of chromium that make it most versatile and indispensable are its resistance to corrosion, oxidation wear and galling and enhancement of hardenability. Chromite is used mainly in metallurgical industry in the production of Ferro-alloys
78 e.g., Ferro-chrome, charge-chrome and silico-chrome which are used as additives in making stainless steel and special alloy steel. Hard lumpy chromite is used for high carbon ferro chrome while friable ore and fines briquettes are used for low carbon ferro chrome. Both briquetted fines and lumpy ore are used in production of charge chrome.
4.6.2 Due to high melting point, 1700 – 1800 degree Celsius, high quality lump chromite ore is used for manufacturing of chrome magnesium brick to be used as insulating lining in blast furnace.
4.6.3 Indian Reserves/Resources of Chromite
4.6.3.1 As per the UNFC system, total resources of Chromite in the country, as on 1st April 2010, are estimated at 203 million tonnes, comprising of 54 million tonnes of reserves (26%) and 149 Million Tonnes of remaining resources (74%). Sukinda Valley in the state of Odisha, with one of the largest single deposits in the world, accounts for 97% of Indian chromite ore deposits. Minor deposits are scattered over Manipur, Nagaland, Karnataka, Jharkhand, Maharashtra, Tamil Nadu and Andhra Pradesh. (Annexure – 4.3)
4.6.4 Production, Export & Import of Chrome Ore in India
4.6.4.1 Domestic production of chromite has been on a decline since 2006-07. Production fell from a peak of 5.296 Million Tonnes in 2006-07 to 3.143 Million Tonnes in 2009-10 (Table 4.18). This decline has mainly been on account of poor market demand – both global and domestic.
Table – 4.18 Production of Chromite, (2005-06 to 2009-10) (In ‗000 tonnes) India 2005-06 2006-07 2007-08 2008-09 2009-10 (P) ALL India (Total) 3714 5296 4873 4073 3143
Source: Indian Bureau of Mines
4.6.4.2 Export and import of chromite during 2000-01 to 2009-10 are furnished in Table – 4.19 below. While imports of chromite have not been significant, they are on a higher level in the first three years of the 11th FY plan while exports continue to be disturbingly high with substantial year to year variations. The rising exports are to be seen in the context of the fact that in comparison to the world reserve of chromite which is in excess of 11 Billion Tonnes, India's reserves are only about 203 Million Tonnes.
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Table – 4.19
Export and Import of Chromite
(‗000 Tonnes)
Year Export Import
2000-01 660 55 2001-02 1182 1 2002-03 1098 2 2003-04 745 2 2004-05 1117 3 2005-06 693 5 2006-07 1203 5 2007-08 907 121 2008-09 1899 94 2009-10 (P) 689 96
Figures rounded off (P) : Provisional
Source DGCI & S, Kolkata
4.6.4.3 Chromite resources in the country are not abundant. The country possesses only about 1.8% of the total chromite ore reserves of the world but exports 30-35% of world share. The steel industry has sought restrictions on exports of chromite ores. The government has put in place a fiscal framework to discourage excessive export of chromite ores.
4.6.5 Consumption of Chromite in India
4.6.5.1 The reported consumption of chromite in the organized sector increased by 8% from 2,162 thousand tonnes in 2008-09 to 2,344 thousand tonnes in 2009-10, mostly in Ferro-alloys/charge-chrome category (Table 4.20). In addition, chromite in substantial quantities is also consumed in small-scale Ferro-chrome units for which information is not reliably available.
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Table – 4.20
Reported Consumption of Chromite, 2005-06 to 2009-10 (By Industries)
(In 000‘tonnes) Industry 2005- 06 2006- 07 2007- 08 2008-09 2009-10(P) All Industries 1345 1786 2499 2162 2344 Chemical 5 5 5 5 5
Ferro-alloys (including charge- chrome)
1319 1757 2470 2132 2314
Refractory (including iron & steel) 21 23 23 24 24
Others (foundry, ceramic, glass) ++ 1 1 1 1
Figures rounded off. (P) : Provisional
++ - Negligible/less than one thousand tonnes Source: Data collected on non-statutory basis.
4.6.6 Projections of Demand and Production of Chromite duringe 12th Five Year Plan
4.6.6.1 Chromite ore is used to produce Ferro chrome and charge chrome. Ferro Chrome, in turn, is used in the production of stainless steel of 200, 300 and 400 series and also of chromium base alloy steel. On the basis of around 3.39 Million Tonnes of projected demand for stainless steel by the end of the 12th Five Year Plan, total requirement of Ferro chrome in the year 2016-17 has been estimated to reach 1.726 million tonnes.
4.6.6.2 Total demand for Ferro-chrome / Chrome Alloys in the terminal year of the 12th Five Year Plan has been estimated at about 1.726 Million Tonnes based on the following assumptions:
A 10% annual growth in demand for stainless steel from a base level of 2.10 Million Tonnes in 2011-12 reaching a level of 3.39 Million Tonnes by 2016-17
Projected demand of 0.5 Million Tonnes of Chromium based Alloy Steels by 2016-17.
4.6.6.3 Based on the above projections of output growth in the principal end- using sectors, demand for Chromite, in its turn, has been estimated to reach a level of 4.313 Million Tonnes by 2016-17 (Table – 4.21) on the basis of the following assumptions:
A specific consumption norm of 2.5 Tonnes of Chromite ore to produce 1 Tonne of Ferro Chrome/ Chrome Alloy,
Exports reaching 0.805 Million Tonnes in 2016-17 from a level of 0.500 Million Tonnes in 2011-12.
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Table – 4.21
Demand Forecast for Chromite
Projected
Demand/Requirement 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Stainless Steel (Million Tonnes)
2.1 2.31 2.54 2.8 3.08 3.39
Chromium based Alloy Steel (Million Tonnes)
0.35 0.4 0.43 0.45 0.48 0.5
Ferro Chrome Requirement for Projected Domestic Production of Stainless Steel & Chromium based Alloy Steel (Thousand Tonnes)
555 611 672 741 838 921
Projected Exports of Ferro Chrome (Thousand Tonnes)
500 550 605 665 732 805
Total Ferro Chrome Demand (Thousand Tonnes)
1055 1161 1277 1406 1570 1726
Total Chromite Requirement
(Thousand Tonnes) 2638 2903 3193 3515 3925 4313
4.6.6.4 Assuming a growth rate of 7% per annum, the year-wise projected production of Chromite during the 12th Five Year Plan is shown in Table – 4.22.
Table – 4.22
Production Forecast of Chromite
Projected Production/Output 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Chromite (Thousand Tonnes) 3500 3745 4007 4288 4588 4909
4.6.6.5 It is interesting to note that production forecast for the terminal year of the Plan at 4.909 million tonnes is lower than the peak production level of 5.3 million tonnes reached in 2006-07. Chromite production has been on the downtrend since then as exports tapered due to weak global market conditions. This is a welcome development from the point of view of conservation of local resources for future value-addition.
4.6.7 Development and Policy Recommendations for Chromite
4.6.7.1 Following are the major recommendations for development of the Chromite sector in India:
i) Extensive exploratory drilling through national agency is required to convert the remaining resources of 149 million tonnes of chrome ore into the reserve category and to explore new areas for addition of mine reserves. To augment supply of chromite ores, the following measures can be taken: (a) Exploration of deep seated ore bodies on priority basis by central and state government agencies; (b) development of technology for extracting friable and
82 deep seated chromite ore of Sukinda Valley by underground mining methods; and (c) promotional drilling by GSI/ MECL in the potential chromite bearing areas; (d) Intensive R & D efforts for using low grade ore, with or without blending.
ii) The ore deposits of Sukinda valley of Odisha are generally of friable nature and all of them are the open pit mines which have reached the optimum pit limit. The stripping ratio in some cases has reached 1:20 and therefore immediate efforts are required for underground method of mining.
iii) A comprehensive plan to develop the Sukinda Valley through some national agency is essential in order to make the entire mining of the area more scientific, systematic and planned.
iv) It is expected that domestic production is sufficient to meet the requirement of Ferro-Chrome production required for projected steel production by the terminal year of the 12th Five year plan.
v) Chromite resources in the country are not abundant. The country possesses only 1.8% of the total chromite ore reserves of the world but exports constitute 30-35% of the world trade. Therefore, there is an urgent need to conserve this critical input for the use of domestic industry and bring in fiscal measures against exports.
4.7.0 Ferro Alloys
4.7.1 Ferro alloy units initially came up in the four states of Andhra Pradesh, Karnataka, Maharashtra and Odisha, mainly due to proximity to raw material resources. After deregulation of the Indian steel industry in 1991-92 many units came up in Arunachal Pradesh, Bihar, Chhattisgarh, Gujarat, Goa, Jammu, Jharkhand, Kerala, Madhya Pradesh, Meghalaya, Sikkim, West Bengal, etc. where ‗Power‘ was made available at reasonable tariff as compared to other States.
4.7.2 Capacity in the Indian Ferro Alloys Industry
4.7.2.1 The furnace capacity in the Industry was around 600 MVA prior to liberalization. Capacity addition was over 700 MVA before the 11th Five Year Plan. An additional 1600 MVA capacity has been added during 11th Five Year Plan. As a result, the furnace capacity has crossed 2900 MVA and by tonnage capacity has crossed 4.65 million tonnes per annum. The break-up of the same is given hereunder-
Capacity (Million Tonnes)
Manganese Alloys 2.75
Chrome Alloys 1.60
Ferro Silicon 0.25
Noble Alloys 0.05
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4.7.3 Production, Export & Import of Ferro Alloys
4.7.3.1 The Indian Ferro Alloys industry is operating at below 70% of its capacity. Production of bulk and noble Ferro Alloys during 11th Five Year Plan are shown below in Table – 4.23.
Table – 4.23
Production of Ferro alloys during 2005-06 to 2009-10
(Tonnes)
Production 2009-10 2008-09 2007-08 2006-07 2005-06
Bulk Ferro Alloys 2462775 2224502 2385537 1973688 1622378
Noble Ferro alloys 30858 27235 29185 27763 23049
Grand Total 2493633 2251737 2414722 2001451 1645427
4.7.3.2 Export of Ferro alloys has increased over the years from 15% of the production in 1991-92 to around 30% and further to 40% at present. In terms of value, exports which were at around Rs. 2500 million have reached Rs. 68778 million in 2008-09. Exports during the 11th Five Year Plan have been as shown in
Annexure - 4.4.
4.7.3.3 Imports of bulk Ferro- alloy were negligible in the past, except for Ferro nickel. During 10th and 11th Five Year Plans, imports of bulk Ferro alloys have increased due to drastic reduction in import duty rates. Ferro silicon is the main bulk Ferro alloy to be imported. Details of import and export of Ferro-alloys are placed in Annexure – 4.4 & 4.5.
4.7.4 Projections of Demand/Consumption and Production of Ferro Alloys during the 12th Five Year Plan
4.7.4.1 Bulk Ferro Alloys (viz. ferro manganese, ferro silico manganese, ferro
silicon, ferro chrome, etc.) manufactured in submerged arc furnaces, and Noble Ferro Alloys
( viz. ferro molybdenum, ferro vanadium, ferro tungsten, ferro silico magnesium, ferro titanium, ferro boron, etc.) manufactured through the alumino thermic process, are used in the production of steel as deoxidants and alloying agents to impart particular physical properties to finished steel products. Growth in the steel industry, therefore, drives the demand/consumption for Ferro-alloys. Depending upon the process of steel making and the type of steel being made, the requirement of different Ferro alloys varies within a wide range.
4.7.4.2 Based on the demand forecasts of steel for the 12th Five Year Plan, projected consumption of Ferro Manganese and Silico Manganese together has been estimated at 3.024 Million Tonnes and that of Ferro-chrome at 1.726 Million Tonnes by the end of 12th Five Year Plan. The year-wise projections also include possible exports and are shown in Tables – 4.24 & 4.25.
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Table – 4.24
Projection of Manganese Alloys Demand During the 12th Five Year Plan