An overview of a growing mining and steel industry and its potential opportunities
Resource mapping and mining of iron ore in India
While India has an estimated iron ore reserve of 25-30 billion tonnes, it is also true that the ‘obvious geological potential’ for iron ore occurrence is much higher. It is said that only about 10 per cent of the potential 5000 square kilometers has been explored due to forest cover, issues of access and activism. Iron ore occurs in several parts of India: areas in the east, west and parts of central south have been explored, and in turn account for the 200 million tonnes of annual production of iron ore.
There has been considerable instability in the industry in the recent past, with the government seeking to curb illegal mining, and all iron ore production suspended while government approvals were reclarified. A semblance of order, backed up by judicial interventions and redefining of resource allocation rules, seems to have quietened the situation.
Iron ore industry and role of the state
Given that domestic steel production in India currently stands at around 85 mtpa, and all of it is not iron ore-based – a significant amount of iron ore is exported. The state-owned companies play a significant role in mining and sale of this tonnage. Further, the government’s recent efforts to bring in greater control and monetisation of the resource, even when mining is carried out by private players, has enhanced the role of the state to such an extent that traditional models of captive iron ore allocated and tied up to steel capacity seem to be not as attractive for leaseholders any more.
The levies imposed under various pretexts – such as royalties, various taxes to pay for development of the iron ore districts, social costs and allocation of iron ore assets through the auction route – have pushed cost of ownership and operation to such an extent that the gap between costs involved in using local ore and that of importing iron ore have thinned considerably. It remains to be seen whether Indian steelmakers can still count domestic iron ore availability at low cost as a significant competitive advantage. Further, as many of the steel plants are land-locked, and dependence on nearby iron ore resources is high, a steep rise in costs has dampened the competitiveness of Indian steel products.
Further, the various states have now specified a limit on tonnage of total extraction of iron ore in various regions, based on macro environmental impact assessment. While conceptually in the right direction, these limits are thought to be conservative – and industry is actively seeking a revision based on deeper assessment of balance between needs of the steel industry and environmental management initiatives.
Properties of the iron ore
Almost two thirds of the proven iron ore resource tonnage of 25 bt in India is hematite. Except for Kudremukh in western India (wherein mining is now discontinued for ecological reasons), there have been no major deposits of magnetite exploited to date.
The hematite ore, which occurs in eastern, western, central and southern regions of the subcontinent, displays different characteristics across regions. Eastern India ore, for example, is largely high Fe but also high in alumina – which is finely dispersed within the ore – making its removal very difficult. Ores in western and central regions appear somewhat better on the alumina front and are often friable and higher in silica content. Magnetite, usually of lower grade, has not been exploited to any significance. Apart from less extensive deposits of magnetite, this is also due in part to the fact that a lot of iron ore in India is still used in lump form, with minimal beneficiation. The generally lower grades in magnetite and lower perceived reducibility of lump magnetite in blast furnaces make it less popular.
Implications of ore quality for ironmaking industry – difficulties in beneficiation, sintering, pelletising
The quality of the ore, two thirds of which is hematite, varies across regions. As mentioned above, the eastern India ore contains significant levels of finely dispersed alumina. As a result, it is common to find feed grades of 60 Fe, while discard at 49-50 Fe, with alumina reaching 7-10 per cent. Further, in order to get sufficient liberation as well as natural breakdown of the particle size during processing, a large proportion of the ore becomes superfine. Recovery of these fractions (1-40 microns) from wet processing to remove the ‘slimes fraction’ presents its own challenges.
Difficulties in smelting alumina containing ore through the blast furnace include formation of viscous slag, resultant lower productivity and higher fuel consumption. Further, agglomeration of the ore also presents problems – sintering high alumina ore leads to high melting slags with brittle bonding phase and has implications for strength of the sinter despite the higher heat input. Thus, the agglomeration strategy is evolving as a mix of sintering and pelletising; Tata Steel and several others are now factoring this into their plans. At the moment only TSL uses a blast furnace burden comprising as much as 40-45 per cent pellets, the rest being sinter and lump ore.
While alumina per se does not interfere so much with pelletising, the ores (at least those of eastern India) are characterised by the presence of alumina – which is associated with various hydrated oxides – goethite, kaolinite, gibbesite, and laterite. As such, even though Fe often looks respectable (at 59-63 Fe), the presence of alumina to the extent of 3-7 per cent and associated hydrated minerals lead to endothermic reactions and breakdown of structures at various temperatures between 100 and 900 degrees Celsius.
Given that (per capita) steel consumption is at a low level of 60 kg per year in India, and that other major sources of Fe via scrap – from renewal of infrastructure, faster recycling of cars and other machinery – will take time to build, iron ore will continue to be the mainstay for steel production in the country. The iron ore industry therefore needs to consolidate its position and build resilience.
This abstract was originally presented at the AusIMM Iron Ore 2017 conference held in Perth.