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Indian

Ferro

Alloy

Scenario - An Overview - Sanjay Sengupta

Role of Ferro Alloys

Ferro Alloys are used in steelmaking which consists of less than one Percent of the total raw material required for steel production. Despite of being a very low constituent, Ferro Alloys are vital additives for steelmaking.

The principal function of ferroalloy addition is that it increases the resistance of steel to corrosion and oxidation, improves its hardenibility, tensile strength at high temperatures, wear and abrasion resistance and increases its other properties like creep strength etc. Ferro Alloys are generally used to impart engineering properties to steel. Ferro Alloys are vital input for producing all type of steel and are used as raw material in the production of special steels, alloy steels and stainless steel.

Demand Drivers of Ferro Alloys

The major demand drivers of Ferro Alloys are:

Crude Steel Production

erro Alloys are vital Fa d d i t i v e s f o r steelmaking. These are

special alloys of Iron containing some chemical elements like Mn, Cr, Si, C etc. These Alloys are used in steelmaking as de-oxidants and also as alloying Agents. Ferro Alloys are added in steelmaking not only for de-o x i d a t i o n b u t a l s o f o r i m p r o v e m e n t i n t h e mechanical properties of steel. Depending on the Process of steelmaking and the type of steel to be produced, the Requirement of Ferro Alloys varies widely.

Alloy and special steel Production

Stainless Steel Production

Types of Ferro Alloys

There are two types of Ferro Alloys known as BULKFERRO ALLOYS and NOBLE FERROALLOYS.

Bulk Ferro Alloys are H. C. Ferro Manganese, MC Ferro Manganese L.C. Ferro Manganese, Silico Manganese, M.C.Silico Manganese, Ferro Silicon, HC Ferro chrome/charge chrome, L.C. Ferro chrome etc. Noble Ferro Alloys are Ferro Molybdenum, Ferro Vanadium, Ferro Tungsten, Ferro Silico Magnesium, Ferro

A l u m i n i u m , F e r r o S i l i c o Zirconium, Ferro Titanium, Ferro Boron,

Ferro Nickel Magnesium etc.

Ferro Alloys As De-oxidant For Steelmaking

Ferro Alloys are used for de-oxidation of the steel melt and also as an alloying element addition depending on the type of ferroalloy. It is the relative

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affinity of alloying elements/ de-oxidizers towards oxygen at different temperatures that determines the method and the time of addition of ferroalloys for achieving the optimum result.

In general, the loss of ferroalloys is highest when introduced in the furnace than when added to the jet of steel or the ladle on tapping. De-oxidants like Si-Man, Fe-Mn, Fe-Si and aluminium are used singly or in combination depending on the quality of steel to be produced.

For achieving the lowest level of oxygen in the steel melt, aluminium De-oxidation is preferred. Also, for the silicate inclusions in steel, Si-Mn and aluminium

are used in combination as de-oxidants which results in effective de-oxidation.

Growth of the Ferroalloy Industry in India:

Ferroalloy production in the organized sector started in the mid-sixties Of the last century. Initially, ferroalloy units came up in the states of Andhra Pradesh, Karnataka, Odisha and Maharashtra mainly due to Availability and proximity of raw material sources.

The second phase of the Ferroalloy industry occurred during the 1980 On product diversion, assimilation, advanced technology as well as setting up of Export

Oriented Units (EOUs) aimed at earning foreign exchange. The Indian Ferroalloy industry was liberalized in 1991-92. As a result, a number of small and medium units having a transformer rating between 2.5 MVA and 16.5 MVA emerged in the production of BULK Ferro Alloys in the States of Chhattisgarh, Madhya Pradesh, West Bengal, Pondicherry, Goa, Jharkhand and Meghalaya.

7. Major Producers of Ferro Alloys In India

The names, locations and product-mix of some major producers of Ferro Alloys are shown in Table -1.

Name of Producer/Location Product- Mix

ChandrapurFerroAlloys Ltd. Chandrapur, Maharashtra, SAIL

Sandur Manganese & Iron OreLtd.,Haspet, Karnataka

Ispat Alloys Balasore, Odisha

Ferro Alloy Corporation Ltd. Vijayanagram, A.P.

*Indian Charge Chrome Ltd., Chandwar, Odisha

Ferro Alloy Corp.Ltd., Balasore,Odisha

*Indian Metals & Ferro AlloysLtd.,Rayagara, Karatpur, Odisha

*Tata Steel Ferro Alloy Plant, Bamnipar, Kendujhar, Odisha

Tata Steel Ferro Alloy Plant, Rawmet, Odisha

Jindal Ferro Alloys Plant, Kothavasala, A. P.

Jindal Stainless Ltd, Raigarh, Chattisgarh

Tata Steel Ferro Alloy Plant Goda, Odisha

Nav Chrome Ltd, Raigarh, Chattisgarh

Ferro Chrome Ltd, Odisha

Jeypur Sugar Ltd, Jeypur, Odisha

VISL. Bhadravati Karnataka- SAIL

Nava Bharat Ferro Alloys Ltd, Polancha, A. P.

Rohit Ferro Tech Ltd., Bankura, West Bengal

M. B. Ispat Corporation, Bamunara, Burdhawan, W. Bengal

VBC Ferro Alloys Ltd, Rudram, Medak, A.P.

Ferromanganese, Ferrochrome

Ferro Manganese, Silico Manganese

Ferro Manganese, Ferro Chrome

Ferro Manganese, Ferro Chrome

Charge Chrome, Ferro Chrome

Charge Chrome, H.C. Ferro Chrome

Ferro Chome, Charge Chrome,Ferro Silicon

H. C. Ferro Chrome, Charge Chrome

H. C. Ferro Chrome

Ferro Chrome

Ferro Chrome

Silico Manganese, Ferro Manganese

Ferro Manganese, Silico Manganese

Ferro Chrome

Ferro Chrome

Ferro Chrome

Ferro Chrome, Silico Manganese

Ferro Chrome

Ferro Manganese, Silico Manganese

Ferro Manganese, Silico Mangnese

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* These are 100% Export Oriented Units (EOUs)

8. New Projects & Expansions

Some of the new projects in the Indian Ferro Alloy sector and expansion of capacities planned and were, scheduled to be commissioned by 2014-15 are mentioned below:

Costal Ferro Alloys of Abhijit Group has planned to set up a Ferro Manganese unit of 352.000 tpy capacity at Haldia in West Bengal. The unit will install 16 submerged arc furnaces with a capacity of 13.5 MVA in two phases. In Phase I, eight furnaces will be installed at an investment of Rs. 550 Crore.

Metsil Exports has planned to set up a ferro alloy unit of 36,000 tpy capacity at Gooty in the Anantapur district of Andhra Pradesh at a cost of Rs. 60 Crore.

RINL and Manganese Ore (India) Ltd. (MOIL) have formed a joint enture named RINMOIL and will set up a joint venture project for producing ferroalloys. The JV project will come up in the Vijayanagaram disrict of Andhra Pradesh. The feasibility report has been prepared by MECON.

Samadadia Enterprises Ltd. has planned to set up a FerroAlloy Unit alongwith a captive power plant at Jargarh in the Jabalpur district of Madhya Pradesh at an estimated investment of Rs. 2696 crore. Haritha Ferro Alloys have planned to set up a 62,380 tpy capacity Ferro Alloy Plant at Hakimpet in the Medak district of Andhra Pradesh. The project will be implemented in two phases and will involve an investment of Rs. 350 crore

Shri Hari Ferro Alloys will set up a Ferro Alloys unit at Bhikanoor in the Nizamabad district of Andhra Pradesh in two phases. The first phase will include a Ferro Silicon unit (11,088 tpy capacity) and a Ferro Manganese Unit (14,784 tpy capacity) and a sub-inerged electric furnace.

Time Ferro Alloys is expanding its Barjora facility in the Bankura district of West Bengal by increasing its ferro alloy capacity from 11,000 tpy to 34,000 tpy at an investment of 25 crore.

Andhra Ferro Alloy is expanding its Ferro Alloy capacity from 20 TPD to 100 TPD of the unit at Srinivasnagar in the Vijayanagram district at a cost of about Rs. 25 crore.

Utkal Manufacturing and Services, the logistic unit of IMFA group, has planned

to expand the capacity of its charge chrome furnace from 30 MVA to 60 MVA of its Chaudwar unit in the Jaipur district of Odisha at an investment of Rs.100 crore.

Balasore Alloys has planned to expand the capacity of i ts chrome ore beneficiation plant from 5,000 TPM to 7,500 TPM, the unit is situated at Balgopalpur in the Balasore district in Odisha, at an investment of Rs.20 crore.

Some of the projects may be delayed indefinitely due to land acquisition problems, gett ing environmental

clearance. Some may not come up at all due to the failure to obtain credit from Banks or other financial institutions. But the overall capacity of the Indian. Ferro Alloy industry is destined to go up ultimately.

9. Capacity

Capacity addition of the Indian Ferro Alloy Industry as on 31-03-11 is estimated at around 2,300 MVA. As a result, the transformer capacity has gone up to about 2,900 MVA and in tonnage term, it has crossed 5.15 million tonnes. The break-up is shown below:

Type of Alloys Capacity MP) (2010-11)

Production In 2010-11(MT)

CapacityUtilisation(%)

Manganese Alloys 3.16 1.70 54

Chromium Alloys 1.69 1.04 62

Ferro Silicon 0.25 0.12 48

Noble Alloys 0.05 0.03 60

Total 5.15 2.89 56

Source : IFAPAIn 2009-10, the capacity utilisation was 62 percent. With many new Ferro Alloy units coming up and expansion of existing units, the capacity of the Indian Ferro Industry is expected to go up substantially during the

th 12 Plan.

10. Production of Ferro Alloys In

India: 2007-08 to 2010-11.

Production of Ferro Alloys in India between 2007-08 and 2010-11 is presented in Table2.

Table-2: Production of Ferro Alloys In India: 2007-08 to 2010-11.

Type of Ferro Alloys

(A) BULK Ferro Alloys

H.C. Ferro Manganese

M.C. Ferro Manganese

L.C. Ferro Manganese

Silico Manganese

M.C. Silico Manganese

L.C. Silico Manganese

Ferro Silicon

HC Ferro chrome/charge chrome

L.C. Ferro chrome

SUB-Total (A)

2010-11 (P)

390,000

8,000

6,000

1,250,000

24,000

25,000

1,17,000

10,30,000

2,000

2,852,000

2009-10

341,883

8,222

6,018

1,066,485

24,108

25,454

97,682

8,90,916

2,007

2,462,775

372,286

8,386

5,775

8,89,434

24,087

22,368

1,10,742

7,90,072

1,352

22,24,502

2008-09 2007-08

364,708

7,704

3,905

8,86,325

27,106

33,576

96,972

9,64,806

235

2,38,5537

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(B) Noble Ferro Alloys

Ferro Molybdenum

Ferro Vanadium

Ferro Tungsten

Ferro Silico Magnesium

Ferro Aluminium

Ferro Silico Zirconium

Ferro Titanium

Ferro Boron

Ferro Nickel Magnesium

Sub-Total (B)

Grand Total (A)+(B)

Growth Percentage

3,050

1,500

150

18,500

7,600

120

2,100

90

250

33,360

2,885,360

15.70%

2009-10 2008-09 2007-082010-11

2,882

1,389

150

17,132

7,017

120

1,929

90

209

30,858

2,493,633

10.74%

2,112

1,501

150

13,400

8,170

37

1,561

83

221

27,235

2,25,1737

(-) 6.75%

2,899

1,585

51

13,525

8,877

109

1,937

80

122

29,185

2,414722

20.65%

Source: IFAPA (P) = Provisional

11. Exports of Ferro Alloys from India

Exports of Ferro Alloys from India between 2007-08 and 2010-11 are Shown in Table- 3Table-3: Exports of Ferro Alloys From India: 2007-08 to 2010-11 (Tonnes)

Product 2009-10 2008-09 2007-082010-11

Ferro Manganese: Carbon containing>2% by weight

Other Ferro Manganese Ferro Silicon containing>55% of Si

Other Ferro Silicon

Ferro Silico Manganese

Ferrochrome: Carbon containing>4% by weight

Other Ferro Chromium

Charge Chrome

Sub-Total (A)

(A) BULK Ferro Alloys

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Product 2009-10 2008-09 2007-082010-11

Ferro Tungsten

Ferro Titanium

Ferro Vanadium

Ferro Niobium

Ferro Phosphorus

Ferro Columbium

(B) Noble Ferro Alloys

Ferro Molybdenum

Ferro Silco Zirconium

Ferro Silco Magnesium

Ferro Boron

Ferro Silico Chromium

Others

Sub-Total (B)

Grand Total (A)+(B)

Value Rs. Million(Approx)

Percentage of exports

30

2,156

64

12. Imports of Ferro Alloys By IndiaImports of Ferro Alloys by India between 2007-08 and 2010-11 are shown in Table-4.Table- 4: Imports of Ferro Alloys by India: 2007-08 to 2010-11 (tonnes)

Product 2009-10 2008-09 2007-082010-11

(A) Bulk Ferro Alloys

Ferro Manganese: Carbon Containing>2% by weight

Other Ferro Manganese

Ferro Silicon combining >55% of Si

Other Ferro Silicon

Ferro Silico Manganese

Ferro Chromium: Carbon containing>4%by weight

Other Ferro Chromium

Charge Chrome

Sub-Total (A)

-

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Product

(B)Noble Ferro Alloys

Ferro Molybdenum

Ferro Vanadium

Ferro Tungsten

Ferro Silico Magnesium

Ferro Silico Chromium

Ferro Silico Zirconium

Ferro Titanium

Ferro Boron

Ferro Niobium

Ferro Phosphorus

Ferro Zirconium

Others

Sub-Total(B)

Grand Total (A+B)

Total Value Rs. Million

% age increase in Import Value

2009-10 2008-09 2007-082010-11

1658

N.B.: Import of Ferro Nickel is not shown as the same is not Manufactured indigenously. Source: IFAPA

13. Raw Materials for Bulk Ferro Alloys

India has reasonable reserves of Manganese Ore and Chromium Ore To meet the demand of its Bulk Ferro Alloy industry. To boost the volume Of reserves, it is essential to convert the low grade ore by modern Beneficiation process.

Manganese Ore

As per the Indian Bureau of Mines (IBM) Survey Report the all-India Reserves of Manganese Ore as on 01-04-2010 were as follows:

Reserves: 141.977 Mt

Remaining Resources: 288.003 Mt

Total Resources: 429.980 Mt

About 34.14 percent of reserves are of BF grade and 24.33 percent are Ferro Manganese, Medium and BF mixed grades. India produced 2.86 Mt of Manganese Ore in 2010-11 recording a growth Of 17.2 percent over 2.44 Mt in the

previous year.

India's export of Manganese was 117.96 Mt in 2010-11 declining by 59.25 percent over 289.47Mt in the preceding year.

Imports of Manganese Ore in 2010-11 was 1299.6 Mt up by 62.88 percent

Over 797.9 Mt in 2009-10.

Chromium Ore or Chromite

As per UNFC system, the total resources of Chromite in India were as Follows (in thousand tonnes) as on 01-04-2010:

Reserves- 53,970

Remaining Reserves- 149,376

Total Reserves: 203,346

Production of Chromite in 2010-11 was 4.26 Mt as against 3.14 Mt in 2009-10 recording a growth of 35.67 percent.

India exported 173,000 tonnes of chromite

in 2010-11 as compared to 689,000 tonnes in 2009-10 with a sharp decline of 74.9 percent. Imports Of chromite in 2010-11 was 86,000 tonnes recording a decline of 10.42 Percent over the previous year.

To support the Ferrochrome industry the export of chromite and ore Concentrate is being brought down gradually. Presently, the industry Is using Chromium Concentrate up to 50 percent.

Usefulness of Chromium Ore

Chromium imparts strength, hardness, toughness, magnetism and offers Resistance to abrasion, corrosion and also acts as a de-oxidant. Low Chromium steel of less than 5 percent Chromium along with small Quantities of nickel are used in the production of rails, automobiles, armor Plates etc. Medium chromium steel containing up to 15 percent chromium Along with small quantities of tungsten, molybdenum or silicon are used in High speed valve-engines and equipment that need resistance to Abrasion, corrosion and oxidation. High chromium steels are stainless and Super stainless that is used for making cutlery, cooking utensils, aircrafts, high speed trains etc.

14. Contribution of Ferro Alloy Industry to India's economy

Major Contributions of the Indian Ferro Industry to India's economy are Presented below:

Foreign Exchange Earner

India is a major exporter of Ferro Alloys and their exports are a major Earner of valuable foreign exchange. Foreign Exchange earned by the Indian Ferro Alloy Industry between 2006-07 and 2010-11 are shown Below.

Earnings of Ferro Alloy Industry Ploughed Back To Society.

The industry has re-invested its profit

Foreign Exchange Value Earned In Million US$

2006-07 364

2007-08 1118

2008-09 1547

2009-10 880

2010-11 2946

Year

Source: IPAPA

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into setting up of Captive Power Plants, acquiring coal and Ore mines, setting up of residential complexes, Schools, colleges, hospitals which has not only helped the socially Backward areas to grow their economy but also in generating additional Jobs in many states, mostly, in remote backward areas.

Electricity Generation

Electricity generated by the Ferro Alloy Industry through its captive Power Plants is also supplied to the Grid, thus increasing the availability of power in India.

It may be mentioned here that although the generation costs of power is Not high, the Ferro Alloy Industry pays a high tariff due to cross- Subsidization to Agriculture sector, Low Plant Factor and high Transmission and Distribution losses (sometimes reaching over 30 Percent).

Ferro Alloy is a power intensive industry. The Ferro Alloy units have to Maintain a minimum demand of 85 percent of power for their operation. According to Indian Ferro Alloys Producers' Association (IFAPA), it Clearly shows that the Ferro Alloy Industry has been paying much more Than the normal power tariff applicable for this industry, which has? Generated substantial revenue to State as well as Central Governments.

Helped Industrialization of Many Sates.

Setting up of Ferro Alloy units in the states like Odisha and West Bengal in The Eastern Region and in Andhra Pradesh and Kerala in the Southern Region has helped to industrialize these regions and has led to their Economic development.

Employment to the People.

It has been estimated that a total of about 80,000 families are supported By the Indian Ferro Alloy Industry which has p rov ided jobs to thousands o f Unemployed people in the plants /units which are located mainly in Remote areas where there is no other source of employment.

15. Major Recommendations of IFAPA for Development of the Indian Ferro Alloy Industry.

Indian Ferro Alloys Producers'. Association (IFAPA) has made the Following major recommendations for the

development and future growth Of Indian Ferro Alloy industry:

. Uniform Electricity tariff need to be made available at internationally Comparable tariff for Ferro Alloy Industry.

. The Government should increase Customs Duty to 7.5 percent from 5 percent (in 2010-11) excepting Ferro Nickel to avoid cheaper imports From other competing countries. If this cannot be done, the customs duty on raw materials should be 'NIL' For production of Ferro Alloys at a cheaper cost.

. The Government should devise a mechanism for making funds available

To the industry at a very low or 'NIL' rate of interest for setting up Captive Power Plants, thus bringing the cost of power generation to a level at Which Ferro Alloy production in India would be viable and sustainable?

The industry should be granted open access to transmit the power Generated by the Captive Power Plants to members' unit(s) without Payment of any surcharge and be only charged for wheeling and Transmission at a low rate. Also, the industry should be given Captive Coal Blocks to do their own coal mining to bring down its cost.

The Ferro Alloy industry needs to be exempted from paying the Electricity Duty on exports of Ferro Alloys as well as on the electricity generation For captive requirement and usage.

The idle Manganese and Chrome Ore bearing areas, reserved for PSUs Needs to be de-reserved and handed over to private parties with requisite Expertise for mineral exploration.

The Government should initiate a comprehensive fast track programme like Aerial Survey to look into the potential deposits -------- for chrome Ore and Manganese Ore deposits which need further exploration.

Considering the projected increase in Carbon and Stainless Steel Production in future, conservation of ore is essential. It is suggested Those exploratory surveys for beyond 100- Meter depth should be Intensified.

There is a scope to implement the scheme of utilizing more and more

Agglomerated feed in the manufacture of Chrome and Manganese Ferro Alloys. Since Pellets have an advantage over briquettes, Pelletization process has to be eventually followed by the Indian Plants to reduce their costs by bringing down the specific power Consumption. There is a

need for suppliers to offer low cost smaller Capacity modern Pelletisation Plants, considering the existing small And medium size furnaces in use by the Ferro Alloy industry. Need for Government sponsored Research in collaboration with the Indian Ferro Alloy industry, particularly in beneficiation of low grade. Manganese Ore with the high content -Fe-content- suitable for the Manganese Ore found in Eastern India.

Mines in the country are national property. Therefore, the Government

Need to instruct the state-owned Orissa Mining Corporation (OMC) to Supply ores on equal proportions to all the manufacturers of FerroChrome Units in the country without any discrimination.

To allocate coal linkage as well as coal mines to the power plants of the Ferro Alloy industry as captive mines.

16. Conclusion

Despite various constraints, the Indian Ferro

Alloy industry has shown Remarkable performance

in recent years. The Industry is providing Vital inputs

for the Indian steel industry and earning valuable

foreign exchange for the country. Major constraints

faced by the industry which is highly power

intensive, Are high cost of power, steep increase in

raw materials/ other input costs, Non-availability of

high grade ore, high financial cost, ever increasing

rail/ road freights, shortage of wagons, inadequate

port facilities, FTAs with Many countries which has

resulted in reduction of customs duty or its Total

exemption. Ferro Alloy industry being an

unorganized entity, there is no exchange Of ideas

and achievements made by the industry. It is essential

to Consolidate the achievements made by the

industry so far and keep Abreast of the inter and intra-

industry developments, besides striving To meet the

quantitative requirements of the steel industry.

Research and Development should be a top priority

and the government should render Positive help in

this regard. The recommendations of the Indian Ferro

Alloy Producers' Association Should be seriously

examined by the Government and to take steps to

Implement them in a proactive manner.

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