India needs to create an additional 50 million mt per year of iron ore pelletization capacity, up from current levels of 20 million mt per year, to meet the targeted 180 million mt of domestic steel production by 2019 with sustainable iron ore mining, according to a report prepared by the Indian Bureau of Mines (IBM).
According to India's new National Steel Policy, with all future steel capacity creation coming through integrated steel plants (ISPs) and coal-based DRI units, the requirement of pellets would be very high. IBM has assumed that if the entire capacity expansion by ISPs uses a minimum of 15 percent pellets for their blast furnaces, the projected pellet requirement would be an additional 25 million mt per year.
In addition, if all new coal-based DRI units use 50 percent of their requirement of raw materials in pellet form, as replacement for high-grade lumps, the demand for pellets would be another additional 25 million mt per year.
The report has been submitted to India's ministry of steel as a background paper for proposed fiscal incentives for miners and steel producers to set up new iron ore pelletization capacities in the country.
All ISPs and coal-based DRI units use high grade iron ore lumps resulting in higher percentage usage of lumpy ore of 45 percent in iron making as compared to 20 percent lumps used globally.
In this regard, IBM has recommended setting up of pelletization capacities by all ISPs, mandatory total beneficiation of ore below 45 percent Fe content and increased usage of pellets by DRI units and gradual discontinuation of use of lumps by these units.