It is saying the obvious that the size of steel development capacity in the pipeline and the growing demand for special products like high-strength steel sheets and superior grades of electrical sheets will demand of this country a more focused approach to research and development (R&D). If this is not going to be the case, then our import dependence on high-technology products, like cold rolled grain-oriented steel (CRGO) sheets, primarily used in the making of electric transformers and other high-strength sheets, such as Trip (transformation-induced plasticity) steel and dual phase steel, can only rapidly grow. Car makers are showing preference for the latter kinds of steel to be able to cut automobile weight, leading to economy in fuel use.
Steel Authority of India chairman Chandra Sekhar Verma reports that India, despite it being on its way to becoming the world’s second largest steel producer (after China), R&D spending of 0.15 to 0.27 per cent of the country’s steel groups’ turnover compares poorly with R&D claiming up to 2.5 per cent of sales of many producers in Japan, Europe and South Korea. Verma makes the point that in many cases, breakthrough technologies in areas of hot metal and steel making and also in product development abroad have been possible because of pooling of resources by the industry and government. Posco invented the Finex technology, a cost-effective substitute for the blast furnace route of steel making, and its commercialisation took 15 years and a spending of 554.1 billion won ($596 million). But in this, Posco found a partner in the government.
“There is always a high-risk element when an R&D project of the Finex kind is undertaken,” notes Verma. “By their very nature, such R&D works are highly capital-intensive and the results are long in coming. In case the government comes forward to back the industry in its R&D endeavours with financial and policy support, then the risk involved is mitigated. Financial support from the Korean government encouraged Posco to develop a process of making hot metal directly from iron-ore fines and non-coking coal, thereby dispensing with sinter plants and coke oven units.” The technology, which Posco is committed to use in its proposed 12-million-tonne (mt) plant in Odisha, is particularly relevant for this country with a high level of coking coal import dependence.
The partnership between steelmakers and a group of national governments represented in European Union in promoting R&D will be worth emulating here. A consortium of 48 EU companies and institutes is developing radically new technologies to cut carbon dioxide emissions by half under the programme ‘ultra-low CO2 steel making (Ulcos).’ The cost of the programme is 40 per cent financed by the European Commission. Ulcos is the consortium’s voluntary response to the challenge of making steel with minimum CO2 emissions. Verma is right that India should be carefully watching the progress steelmakers in EU and other places are making in capping CO2 emissions and finding to what extent we can benefit from their experiences. Incidentally, CO2 emissions of 2.5 tonnes per tonne of crude steel made here make a distressing comparison with world average emissions of 1.7 tonnes per tonne of steel. That steel makers in Japan and Europe are investing heavily in their facilities to make operations increasingly environment-friend ly are a fact of life. All the same, China, because of a laxity at the provincial level, is meeting with limited success in snuffing out rogue mills emitting unacceptably high levels of CO2.
Environment is such a big concern that Minnesota State in the US had no hesitation in extending a grant to enable Kobe of Japan to bring to perfection the ITMK3 technology allowing production of high quality iron nuggets from ore and coal fines. Well, the reason for the grant was Kobe’s decision to build a large pilot plant based on ITMK3 technology in Minnesota. In this endeavour, Kobe found enthusiastic partners in Steel Dynamics, a leading steel producer through the electric arc furnace route and Cliffs Natural Resources, the largest mining group in North America. According to Verma, the Indian steel industry’s leading players will do well to explore the possibility of pooling resources under a single umbrella and further seek government grant as they undertake major R&D work. Will it also not be to the industry’s benefit to integrate R&D work with engineering, which has spelt much success for Nippon Steel and Posco? Consider also the leg-up R&D activities got following joint planning and work between Tata Steel’s European and Indian outfits. We are told the combined R&D at Tata Steel is leading to development of a slew of new products to be introduced here in a series.
The government’s most ambitious R&D programme for steel, assigned to Indian Minerals & Metals, is an attempt to develop a technology allowing carbon-free iron production using hydrogen plasma as smelting reductant of iron ore instead of coking coal. If the project succeeds, the use of coking coal in producing hot metal can be dispensed with. With that, the industry’s culpability as a major emitter of CO2 will also be largely taken care of.
