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Part - IV

Installation of New Capacity and Expansion of Existing Plants
To make the Indian Steel Industry globally competitive it is very important that new capacity using the most efficient and low cost technology should be used. Without new capacity and exports India cannot control the world market. India though has an abundance of iron ore but it has low quality coking coal that hinders in the making of superior grade steel. Hence new alternative technologies for the making of steel like sponge iron, DRI, HBI, etc. would have to be utilized but it is highly imperative that proper estimates for future costs of new technology and pricing of inputs are made before going in for new capacity. Here we look into these alternatives in detail as India has expertise in this field and is practicing these alternative techniques.

Sponge Iron Plants
In recent years, with the significant improvement in steel plant yield, by the use of rolling technology and continuous casting have decreased the amount of in-plant generated scrap and resulted in a shortage of scrap supply throughout the world. It has been found that with the shortage of scrap and the presence of low quality coking coal has led to the emergence of alternative routes of steel making. With a growth in the availability of natural gas India can be made a hotbed of sponge iron production in the world. As per the International Iron and Steel Institute, India has emerged as the largest producer of sponge iron in the world in 2001. Production of sponge iron as an alternative feed material to steel melting scrap, which was being hitherto imported in large quantities by the Electric Arc Furnace Units and the Induction Furnace Units, will result in considerable savings in foreign exchange. In 2003, India made a record production of 6.9mtpa and grew at 22.1% (Table 1). The price trend of sponge iron in relation to scrap is shown in the chart.

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* Contributed by: -
Amit Chaddha,
B.E. (Metallurgy), MMS (Marketing),
School of Management Studies,
MNNIT Allahabad.