Now finds enough space for an integrated steel mill, a power complex and a fertiliser unit in what was once the Sindri fertiliser complex.
Steel Authority of India Ltd (SAIL) could not have asked for more than finding access to the huge tracts of land at Sindri in Jharkhand where till 2002 plant nutrients were made by the country’s first public sector fertiliser unit. In one stroke without going through the increasingly complex and expensive process of buying land, SAIL now finds enough space to pack an integrated steel mill, a power complex and also a fertiliser unit in what was once the Sindri fertiliser complex. Promoters of big projects are finding their cost of acquiring land could scare them out of their wits.
SAIL Chairman Chandra Sekhar Verma has had occasions to speak about the compulsions of building compact steel plants, raising the land use efficiency bar by many notches in view of shrinking land availability. So, when he goes to build a 5.6-million-tonne (mt) mill at Sindri, the industry will be watching the technology he inducts to produce steel cost effectively and occupy minimum space. The new reality in the steel industry is that bigger the mill size, greater should be the efficiency in land use. To give an example, when a Chinese mill installed a huge 5,500-cubic-metre blast furnace or JSW here commissioned a 4,019 cubic metre one, the objective was to do with one unit instead of with a couple. The twin benefits in the exercise are cost saving in making hot metal and economy in land use. The Sindri complex is spread over 6,652 acres of which the usable area is, however, 5,482 acres. All three proposed SAIL projects will have to be highly compact in order to be accommodated in the complex.
In case a greenfield mill is to use Posco’s Finex technology, then the land requirement will be about 40 per cent less than needed for making steel through BF route. As Finex process allows making of hot metal directly from non-coking coal using a coal briquetter and fine ore run through fluidised bed reactors, it dispenses with coke ovens and sinter plants. So a lot of space is saved. Moreover, this new technology is well suited to use ore with high levels of alumina. Verma, who these days is sounding more and more like a technology aficionado, also has other options like Rio Tinto’s Hismelt technology allowing high intensity smelting of ore fines using non-coking coal and Corex smelting reduction process, which Siemens Vai claims could lead up to 20 per cent cost saving in hot metal making.
Since he became SAIL head honcho in June 2010, Verma started looking for opportunities through joint ventures and technology transfer to get into making cold rolled grain oriented steel and auto grade and electrical steels. In fact, these are the steels for which the country is import dependent. Verma also wants SAIL’s rolling mill capacity quickly to be strengthened so that every tonne of saleable steel it makes is sold as finished products. Now, however, semis have a share of 20 per cent of SAIL saleable steel. Unlike at its existing mills where along with capacity expansion transition is made to new technologies, the building of a new mill at Sindri, in the words of Verma, will allow SAIL to induct “state-of-the-art technology.” Verma must be aware that for the proposed mill to be in tune with frontiers of technology, he needs a JV partner. What should work to the advantage of SAIL is that foreign steel majors have discovered that to get a toehold in steelmaking in India, the best route is to have partnerships with established local groups. ArcelorMittal has done this, so also Nippon Steel.
By 2012-13, SAIL will be completing an investment of Rs 70,000 crore to expand its hot metal capacity to 23.46 million tonnes from 13.8 million tonnes, in phases. However, for Verma, who is now to decide the capacity target for 2020 – “this could be anything between 45 and 60 million tonnes to maintain our market share” – a breakthrough at Sindri will be a welcome development. Whatever iron making natural resources may now be at SAIL’s command, Verma will be seeking independent new accesses to iron ore and coal deposits from the Jharkhand government before he sets out to build the mill at Sindri. Incidentally, SAIL has lease rights to around 4 billion tonnes of iron ore. Like many steelmakers across the world, including the largest of them all ArcelorMittal, SAIL is readying itself to increase the size of its raw materials bank.
“It’s not only more of iron ore and coal that we want in SAIL kitty, but we also need to look for reserves of dolomite, limestone and manganese ore,” says Verma. While seeking to enlarge the raw materials bank, SAIL at least once had to use all the tricks in its armoury to fend off some steelmakers from trying to wrest control of slices of 2 billion tonnes of high quality Chiria iron ore deposit. As it seeks to open a 15 million tonnes iron ore mine at Rowghat with deposits of 500 million tonnes, SAIL will have a task in hand to deal with extremist threats and win over the local people on its side.