The Indian sponge iron industry has come a long way post Y2K. It is worthwhile to take a look at its interesting but corrugated journey in this period.
Conventionally, Indian steel making was dominated by blast furnace route and only few sponge iron plants existed. Essar, Ispat and Vikram Ispat were the gas based plants and Tata Sponge was coal based. Initially, there was a lot of apprehension about using sponge iron as an input in EAFs but eventually it was proved that it not only reduces the melting cost but also produces cleaner steel with reduced tramp elements. At the same time the availability and the price of coking coal started behaving erratically giving more reasons for new plants to adopt sponge iron route.
In sponge iron too there was a difference in fortunes between gas based and coal based plants. Gas based plants used MIDREX or HYL technologies and were quite cleaner plants as compared with coal based ones. But here also gas availability was a big problem and this single factor restricted the growth of gas based sponge iron industry in the country. On the other hand, non-coking coal was abundantly available especially in the states like Chhattisgarh, Odisha, Jharkhand etc. At this time, a suitable technology for producing sponge iron through rotary kiln using indigenous non-coking coal and high grade iron ore was developed which opened the floodgates for mini-sponge iron industry in the country. Hundreds of small units having kilns of the capacity ranging from 50 TPD(tonnes per day) to 350 TPD were commissioned in the states mentioned above. The hot flue gas was used to make either power or ferro alloys thus strengthening the bottomline of this ‘mini integrated steel complex’.
Today India is the highest producer of sponge iron, thanks to the rise of coal based sponge iron industry. The viability of this industry also depends on the availability of high grade iron ore and non-coking coal and thus its fortune also fluctuates depending on these parameters. Today the sector is struggling to find a way ahead on the backdrop of ‘Quality Order’ being implemented by the central govt banning the usage of construction steel having high S & P. One needs to add a refining vessel to the existing induction furnace but in today’s depressed industry condition, not many would be in a position to do that. As such the industry is poised at a crucial juncture and it will be interesting to watch how the things unfold in due course.