* Mining curbs force steelmakers to use low-grade iron ore
* Steel firms make investments to use low-grade fines
* India's consumption of fines to rise 50 pct by 2020 - NMDC
By Krishna N Das
NEW DELHI, Aug 12 Indian steelmakers are making
a big push to use locally mined low-grade iron ore fines that
are usually exported, a move that could help the world's No. 4
steel producing nation boost near-stagnant domestic output and
cut imports of the alloy.
India's steel imports rose 15 percent to an all-time high of
7.87 million tonnes, worth $6 billion, in the fiscal year to
March 2013, as output of steelmaking raw material iron ore was
slashed by production bans in key states.
The surge in India's imports helped steelmakers from other
parts of Asia cope with softer demand at home but that might
prove to be brief if Indian mills are able to source more iron
ore locally and thus raise production.
The moves by the mills may also aid India's steps to rein in
imports to address a persistent current account deficit that
helped push its rupee currency to a record low last week.
Steelmakers, including JSW Steel Ltd, Essar Steel
, Prakash Industries Ltd, Monnet Ispat &
Energy Ltd, Adhunik Metaliks Ltd and Steel
Authority of India, are investing in plants that can
process low-grade iron ore dug from the ground and usually
exported to China.
About 100 million tonnes of low-grade fines available in top
producing state Odisha alone could be used to produce 45-50
million tonnes of steel, said Essar Steel Chief Commercial
"Obviously that will have its own pressure on steel prices
and make them more competitive vis-à-vis products from countries
such as Korea, Japan and others, and lower imports," he said.
India's consumption of low-grade fines is expected to rise
to about 120 million tonnes by 2020 from about 80 million tonnes
in the past fiscal year, said N.K. Nanda, technical director at
NMDC, India's largest iron ore producer.
Higher use of low-grade, dust-like fines also means smaller
iron ore imports for India where a drop in output tripled its
imports of the raw material to 3 million tonnes in the fiscal
year ended March 31. But for Indian steel plants, most of which
are located away from the coasts, imports are not
Steel production in India, which consumes only 59 kilograms
of steel per person compared with a world average of 200
kilograms, rose just 2.5 percent to 78 million tonnes in the
last fiscal year.
INCREASED PELLETIZING CAPACITY
India used to be the world's third-largest shipper of iron
ore, but exports slumped to 18 million tonnes in 2012-13 from a
high of 117.4 million tonnes in 2009-10 due to a court clampdown
on illegal mining. Most of the exports were fines, which are
extracted along with higher grades.
Industry body ASSOCHAM, which represents steelmakers, last
month urged the government to discourage exports of iron ore
that can be used at home, saying that the country should export
steel to bring in dollars instead of sending out iron ore.
"It's always better to export value-added products like
steel, but realistically it is not always possible," said
Bhavesh Chauhan, a senior analyst with Angel Broking, adding
many firms were not yet able to use very low-grade ores.
Mineral Enterprises, owner of four iron ore mines, has in
the past year and a half sold 6.6 million tonnes of fines
stockpiled over two decades to companies such as JSW Steel.
"Indian companies have been forced to take whatever is
available and cook, there's no option but to use low grades,
very low grades," said Basant Poddar, owner of Mineral
Enterprises and senior vice president of the Federation of
Indian Mineral Industries.
Because Indian firms did not have plants able to process
low-grade iron ore fines, most generally use ore with iron
content of more than 60 percent, although more than half of the
country's iron ore output is fines with grades of as low as 45
But that is changing.
JSW Steel, India's third-largest steelmaker, commissioned a
20 million tonne-a-year fines processing plant last fiscal year
and is looking to invest more to substitute high-grade ores with
inferior grades, Chairman Sajjan Jindal said.
The processed fines are then generally converted into
pellets, which can then be used to make steel. Higher
pellet-making capacity means the fines can be used to make steel
and both Essar and JSW plan to raise their pelletizing capacity.
Pellet-making capacity in India has jumped to about 60
million tonnes from nearly nothing a few years ago, according to
($1 = 60.8650 Indian rupees)
(Additional reporting by Prashant Mehra in Mumbai and Jatindra
Dash in Bhubaneswar; Editing by Manolo Serapio Jr. and