The Status of The Iron Ore Industry in India

Title: The Status of the Iron Ore Industry in India By Soumit Ranjan Jena CMD Pisces Exim India
ia Pvt. Ltd One can hardly undermine the importance of Iron Ore in todays industrialized worl d. The mineral is simply indispensable for the making of iron and steel which is essential to maintain a strong industrial base. Iron Ore when heated in the pre sence of a reductant will yield metallic iron (Fe). It contains iron oxides, t he primary forms of which are magnetite (Fe3O4) and hematite (Fe2O3). Almost all (98%) iron ore is used in steelmaking which is mined in about 50 coun tries. The seven largest of these producing countries account for about threequarters of total world production. Australia and Brazil together dominate the world s iron ore exports, each having about one-third of total exports. 500 mil lion tonnes, more than double the production of 2009 (200 Mt), was set as a real istic figure for annual Indian iron ore production in 2020, at the iron ore conf erence organised by the Indian Journal of Mines, Metals and Fuels in cooperation with Raw Materials Group, Sweden. Recently at a conference held in Kolkata, several speakers at the iron ore confe rence maintained that there is absolutely no need for political interference to limit iron ore exports or to stipulate that iron ore mining must only be made b y local steel works, if modern technologies and down to earth business considera tions are applied. International experts are of the opinion that the value added by iron ore production itself, even without its actual use into steel productio n, has been the basis of strong economic growth in many different parts of the w orld, such as Western Australia, Minas Gerais in Brazil and northern Sweden. However, it must be noted that there are big risks in trying to combine steel ma king and iron ore mining in the same organisation. The two industries are diamet rically different in their very foundations and souls. Iron ore mining is all ab out producing the same quality year after year. Steel making by contrast is to s ell to customers with continuously varying demands both in quality and quantity. Captive mines have not been proven to be more efficient than specialised miners . India has huge and high quality iron ore resources which are often overseen when global iron ore deposits are surveyed. This might have been correct in the past , when India s domestic demands were small and when its steel industry was very much closed off from the world. However, in the changing scenario with Indian st eel companies becoming global leaders and with Indian iron ore exports to China surpassing 100 Mt, it is no longer so. According to the Indian Bureau of Mines (IBM), iron ore resources in the country amount to a total of 26 billion tonnes, of which 15 billion haematite and 11 bi llion tonnes magnetite. The quality of the Indian resources is excellent, with h igh Fe content and high share lumpy ore. Almost 60 % of the haematite resources have Fe grades above 62 % and 45 % lumpy ore, 33 % fines and 12 % classified as lump with fines and the balance not classified. These are huge figures which are most probably underestimates for several reasons: Detailed exploration has been lacking and almost no modern exploration work has been done. Over the past 25 years resources have grown manifold inspite of quickly rising p roduction levels. The cut-off grade used by the IBM is 55 % which is high by all standards. It is clear that India s iron ore resources are of a superior quality and far be tter located compared to many of the deposits which are at present considered fo r exploitation. It augurs new change in Indian mining sector that the hurdles that have to be ov ercome to reach a production of 500 Mt are now debated and conventional wisdom c hallenged. To reach this level, many legal, technical and political issues have to be addressed. Some of which are: Systematic exploration activities should be increased using modern methods to re ach deeper and cover larger areas should be started. A major potential source of iron ore units for the steel industry in India is fi nes. At present lump ore accounts for most of the blast furnace feed. With incre
asing steel production, a surplus of fines has been available for exports to Chi na. If the fines fraction could be utilised, as it is around the world for sinte r or pellet production or for HBI and similar EAF feed, additional volumes of ir on ores, which today are either not mined or stored in slime dams and waste heap s would be available for both the indigenous steel industry and for exports. Consolidate the small, fragmented mines often not operating with modern technolo gy and hence not extracting optimal volumes but leaving iron ore behind which is sterilised for the future. Besides, these small companies lack the necessary kn owhow and experiences and most important capital to embark on the large projects necessary to grow the iron ore industry. Infrastructure like roads, railways and ports must be up-graded. Land acquisition and licensing of mines must be made seamless and all the doubts whether a deposit found by an explorer will really become a mine must be remove d. The international norm, that whoever discovers a deposit will also be exploit ing it, provided he is able to meet with all environmental norms and other crite ria, must be established also in India. With such changes a junior mining sector could flourish, which would further stimulate the industry. Domestic iron ore prices must reflect the global market situation. The complete reconstruction of the Indian iron ore industry is still some years away, but it is clear that the process has begun in full swing. The nation is ge aring up to become a serious competitor to Brazil and Australia in supplying Chi na with voluminous quantities of high quality iron ore for the long term future. Author box: Soumit Ranjan Jena is working as a CMD in Pisces Exim India Pvt Ltd dealing with minerals and Iron Ore export

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Title: The Status of the Iron Ore Industry in India By Soumit Ranjan Jena CMD Pisces Exim India

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