A common refrain of all domestic and foreign groups planning to build large steel mills here is that land acquisition remains difficult. The problem got exacerbated with some states opting for a hands off policy on land acquisition for hosting industries, including steel mills. We are, therefore, witness to major portions of 10-12 million tonnes (mt) of new steel capacity being added annually by way of expansion of existing units rather than through new projects.
As Tata Steel will soon have its capacity at Jamshedpur expanded to 10 mt, steel minister Beni Prasad Verma wants Steel Authority of India (SAIL) to give thrust to complete expansion of crude steel capacity to 21.4 mt from 12.84 mt, along with comprehensive modernisation without further cost or time escalation. But, once the Rs 70,000-crore investment programme is completed by March 2013, hopefully there will be further scope for capacity addition of significance at the five integrated SAIL mills.
Let’s consider the case of the flagship Bhilai Steel Plant in the SAIL family. Chief executive officer (CEO) Pankaj Gautam admits “racing against time to lift the mill’s crude steel capacity by two mt to seven mt on schedule and then run all new facilities to full steam by June 2013.”
Asked if Bhilai Steel Plant will then still have space to accommodate more capacity in the existing plant area, Gautam said “Some intelligent planning will allow us to squeeze in another three mt at Bhilai. The land scene is such that it behoves all existing mills to make optimum use of space.” He explains that right technology intervention and substitution of some small machines, all relics of the past, by a very large one will allow Bhilai Steel Plant to finally become a 10 mt plant. By way of illustration, Gautam says the commissioning of a very large blast furnace (BF) of 4,060 cubic metre as part of Bhilai Steel Plant’s ongoing expansion will make three old BFs redundant. Their dismantling will make room for installation of another giant BF.
Similarly as the Bhilai Steel Plant commissions a new steel melting shop (SMS) with a universal rail mill in the downstream, an old SMS equipped with energy-inefficient twin hearth furnace will be scrapped. This will allow building of a new SMS for making steel through continuous casting route. In the downstream will be a new mill, the product profile of which will be decided at a later stage, depending on the emerging demand pattern of flat and long products. “The challenge is two-fold. We want more capacity. At the same time, we must make all our steel flawlessly clean and energy efficiently,” says Gautam. The Bhilai Steel Plant may be SAIL’s flagship, but there remains much scope for improvement in its running of coke oven batteries (COBs) and in raising the level of coal dust induction (CDI) in BFs to reduce use of metallurgical coal for which we are heavily import dependent.
Gautam became Bhilai Steel Plant CEO in July. He is paying for the past sins of flogging some COBs well beyond their repair dates. While one COB had to be decommissioned earlier this year, three others are now undergoing “hot repair.” Bhilai Steel Plant as a result is at a stretch to get supplies of coke from other PSUs like Vizag Steel and Neelachal Ispat to supplement in-house production. Some loss in steel output in the circumstances is unavoidable. To save the day, Gautam will have to speed up battery repair and at the same time ensure that the seven-metre long COB built as part of expansion is commissioned in time. Bhilai Steel Plant claims to have the best coke rate in the SAIL family, thanks to CDI of 60 kg a tonne of hot metal. Tata Steel, however, has a better record in blending indigenous coal with imported coal and also in CDI.
Bhilai Steel Plant being dependent on imported coking coal to the extent of
78 per cent of its requirements, compounded further by a major fall in rupee value, pressure is mounting on it to make improvements in coke rate. While it has CDI facilities in four of seven operating BFs, the one now under construction will be highly CDI compliant. In another three years, Bhilai Steel Plant’s CDI rate will likely climb to over 100 kg a tonne of hot metal output.
In the context of Bhilai Steel Plant’s coke generation problem, benefits arising from outsourcing critical inputs like coke and power are engaging the attention of plant officials. Not to speak of steel mills abroad where they outsource almost everything to concentrate on steelmaking alone, some of our new generation mills have discovered the virtues of such a practice. No surprise that their wage bill as a percentage of their turnover is significantly lower than what obtains in SAIL.
In the process of making coke, COBs generate byproducts of value like fertilisers, benzene and tar which are beyond the core competency of steel mills. SAIL has got 30 COBs which it will do well to transfer to third parties to run. For all practical purposes, a kind of outsourcing has begun, with SAIL participating in equal partnership joint ventures in power.
