Sponge Iron Report 

 
Introduction: 
 

Sponge iron is the product created when iron ore is reduced to metallic iron, usually with some kind of carbon
(charcoal, etc), at temperatures below the melting point of iron. This results in a spongy mass, sometimes called
a bloom, consisting of a mix of incandescent wrought iron and slag. Sponge Iron is a recognized alternative to
steel scrap as a raw material for the manufacture of various steel products. The twin issues of rapid depletion of
Coking Coal reserves and the scarcity of indigenous scrap, made the Government of India support production of
sponge iron in the country.

“Sponge iron is a metallic product produced through direct reduction of iron and iron ore pellets in the solid
state. It is a substitute for scrap and is mainly used in making steel through the secondary route. The process
of sponge iron making aims to remove oxygen from iron ore. When that occurs, the departing oxygen causes
micro pores in the ore body making it porous. The final product, when observed under a microscope,
resembles a honeycomb structure looking spongy in texture, hence the name sponge iron. “

Use of sponge iron: 
 
Sponge iron is not useful in itself, but must be processed to create wrought iron. The sponge is removed from
the furnace, called a bloomery, and repeatedly beaten with heavy hammers and folded over to remove the slag,
oxidise any carbon or carbide and weld the iron together. This treatment usually creates wrought iron with about
three percent slag and a fraction of a percent of other impurities. Further treatment may add controlled amounts
of carbon, allowing various kinds of heat treatment (e.g. "steeling").

Today, sponge iron is created by reducing iron ore without melting it. This makes for an energy-efficient
feedstock for specialty steel manufacturers which used to rely upon scrap metal.
 
Industry: 
 
Global Scenario
• The total global production of sponge iron was estimated to be about 49.45 million tons in the year 2004
• India, Venezuela, Iran and Mexico are the four largest producers of sponge iron with about 16%, 14%,
11% and 11% share of world's total production.
• Sponge iron is increasing being used in steel making because of lower availability of scrap in the
international market and increased use of Electric Arc Furnace in steel making.
Indian Scenario
• With the domestic steel industry picking up during the past year and prices moving up in leaps and
bounds, India has emerged as the world's largest producer of sponge iron (or direct reduced iron),
accounting for around 16 per cent of the global output. The domestic average growth rate clocking 21 per
cent as against the average global growth rate of 10 per cent
• India is the global leader with a production of 8.07 million tons (Year 2004), followed by Venezuela
with 6.9 million tons.
• Sponge iron is used to make steel by all Indian steel producers and is a substitute for steel melting scrap.
• Healthy demand growth in steel sector is also pushing sponge iron demand. Apart from declining
availability of steel melting scrap, sponge iron demand has also gone up considerably and is likely to
continue.
• About 45% of the domestic output is through EAF (Electronic Arc Furnace) route. However, going
forward this is slated to increase. With steel production is likely to grow at 6%-7%, the demand for
 sponge iron is likely to grow at more than 10 percent till the year 2007 and then expected to stabilize at
8 percent after that.

Factors Influencing Demand & Supply of Steel Long and Steel Flat
• The demand for steel is dependent on the overall health of the economy and the infrastructure
developmental activities being undertaken.
• The steel prices in the Indian market primarily depend on the domestic demand and supply conditions,
and international prices.
• Government and different producer and consumer associations regularly monitor steel prices.
• The duty imposed on import of steel and its fractions also have an impact on steel prices.
• The price trend in steel in Indian markets has been a function of world's economic activity.
• Prices of input materials for iron and steel such as power tariff, freight rates and coal prices, also
contribute to the rise in the input costs for steel making.

Domestic industry is showing improved performance on back of higher volume, improved realization,
increased operating efficiency and financial restructuring.

Sector-wise Demand of Scrap and DRI/HBI (in lakh tons)

Period Sector Melting Scrap DRI/HBI
2001-02
EAF (Electric Arc furnace) 31 43
IF (Induction Furnace) 55 17
2006-07 EAF 45 60
IF 73 35
2011-12 EAF 64 82
IF 76 56
*HBI = Hot Briquetted Iron

Sponge Iron Production Figures. (in lakh tones)

Year Production Gas Based Growth % Production Coal Based Growth % Production Total Growth %

1990-91 NA NA NA NA 8.6 NA

1991-92 NA NA NA NA 13.00 51.2

1992-93 8.97 NA 4.69 NA 13.66 5.08

1993-94 15.23 69.8 8.09 72.5 23.32 70.07

1994-95 21.89 43.7 12.21 50.9 34.1 46.2

1995-96 29.58 35.1 12.84 5.1 42.42 24.4

1996-97 33.34 12.7 16.87 31.4 50.21 18.3

1997-98 36.42 9.2 17.36 2.9 53.78 7.1

1997-98 36.42 9.2 17.36 2.9 53.78 7.1

1998-99 34.48 -5.3 17.80 2.5 52.28 -2.8

1999-00 34.62 0.4 18.78 5.5 53.40 2.1

2000-01 34.62 0 20.19 7.5 54.81 2.6

NA NA NA NA
2001-02 56.58 3.22
 NA NA NA NA
2002-03 69.09 22.11
NA NA NA NA
2003-04 (p) 80.85 17.02

Manufacturing Process: 
Direct Reduction is an iron making process for the new era, which utilizes natural gas to reduce iron ore to
produce Direct Reduced Iron (DRI). As Direct Reduction Plants are not built on the same, enormous scale as
Blast Furnaces, their investment costs are lower, and they have been mainly constructed in developing countries
where natural gas is relatively inexpensive. Recently, however, even in developed countries, such as the United
States, Direct Reduction Plants are drawing more and more attention as a way to provide a stable supply source
of pure iron, substituting steel scrap
Of several Direct Reduction processes producting DRI, the MIDREX® DR Process, which was developed and
is owned by Midrex Technologies,Inc., a wholly-owned subsidiary of Kobe Steel, accounts for about 60% of
world wide prodution.
 

The reduction of Iron Ore can be achieved by using either carbon bearing material, such as non-coking coal or a
suitable reducing gas in the form of reformed natural gas. The processes employing coal are known as solid-
reluctant of coal-based processes while those employing reducing gases are known as gas-based processes.
Sponge Iron produced by gas-based process is normally hot briquette and hence it is also known as Briquetted
Iron (HBI).

Basic Production flow chart: 
In the decade 1990-2000 the total sponge iron production was distributed as follows:
Gas-Based : 4 Million Tonnes
Coal-Based: 3 Million Tonnes
There are two types of technologies available for producing sponge iron : coal-based and gas-based. In the
former case, coal is the reductant, while for the latter natural gas is used to reduce iron ore. For coal-based
rotary kiln processes, several technologies like SL/RN, CODIR, ACCAR, JINDAL, TISCO and OSIL are in use
while gas-based plants have used MIDREA, HYL - I and HYL - III technologies.

Coal­Based Process 

» This process utilizes non-coking coal as reducing agent along with lumpy rich grade iron ore.
» The reduction is carried out in an inclined horizontal rotary kiln, which rotates at a predetermined
speed. A temperature profile ranging from 800-1050 degree centigrade is maintained along the length
of the kiln at different zones and as the material flows down due to gravity the ore is reduced.
» The hot reduced sponge iron along with semi-burnt coal, discharged from kiln is cooled in water-
cooled cylindrical rotary cooler to a temperature of 100–200 degree centigrade.
» The discharge from cooler consisting of sponge iron, char other contaminations are passed on through
magnetic separators so that sponge iron can be separated from other impurities.
» Later the sponge iron is screened into two size fractions i.e. –3 mm & +3 mm. +3 mm fraction directly
goes for usage, -3 mm fraction can be either used directly where ever it is possible or is to be
briquetted by using molasses and hydrated lime as binders.
The basic reactions in this process is as follows:
 

Raw Material Requirements 
As in case of any process, here also quality of raw materials plays a vital role in obtaining the rated capacity and product 
quality. The iron ore shall have resistance for physical & thermal decrepitation and good reducibility and the coal should 
be of reactive nature along with the characteristics of high fusion temperature and less amount of ash. 

» Chemical and Physical Composition of Iron Ore

Constituent %
Chemical Composition
Total iron 65 - 67 %
Sio2 + al2 o3 2-3%
Cao + mgo 0.5 - 1 %
Sulphur 0.02 % max.
Phosphorous 0.04 % max.
 Physical Composition
Size 5 - 20 mm
Shatter Index + 95 %
Tumbler Index + 88 %
Abrasion Index + 5 % max
Reducibility Index + 94 %
Thermal Degradation Index 5%

Typical Chemical Analysis of Coal

Constituent %
Moisture 8 % max
Total Iron 27 - 30 %
Ash 23 -25 %
Fixed Carbon + 40 %
Size 0 - 20 %
Ash Softening Point 1250 deg cent
Calorific Value 5200 k . Cals / mole
Reactivity 2.2 co / gm . Deg c

Typical Chemical Analysis

Cao 40 - 45 %
L.O.I 40 - 45 %
Insolubles 5-7%
Size 0.5 - 4 mm

Typical Analysis of Sponge Iron Produced in Coal Based Process

Total Iron 91 - 93 %
Metallic Iron 80 - 84 %
Metallisation 90 - 92 %
Gangue 3-4%
Carbon 0.25 %
Sulphur 0.02 - 0.03 %
Phosphorous 0.035 - 0.05 %
Gas­Based Process: 

»This process utilizes natural gas the reducing agent.

»Natural gas is reformed to enrich with H2 and Co mixture and this enriched and reformed gas mixture is
preheated in gas-based process.
»A vertical retort is used for the reduction of iron ore as against a rotary kiln in coal based sponge iron
process.
»When the gases are traveling upwards the charge moves downward by gravity.
»Gas-based sponge iron is not subjected for magnetic separation, as no contamination with non–magnetic
is possible either it can be cooled indirectly or briquetted in hot condition to get hot briquetted iron
(HBI).
The basic reactions are as follows:

There are only two well established processes

1. Midrex
2. Hyl
In gas-based process more preferable feed is pellets but lump ore is also used for with proper size distribution to have
required permeability.

1.MIDREX® Process

A MIDREXTM Direct Reduction Plant is composed of two main facilities : the Shaft Furnace, where iron ore is reduced,
and the Reformer which generates the reforming gas to be charged into the Shaft Furnace. The MIDREX® DR Process is
able to use both lump and pellet as the raw material and recycles the used gas, therefore the process has both low energy
consumption and low environmental impact, making it an environmentally friendly process. We are able to produce not
only Direct Reduced Iron (DRI) but Hot Briquetted Iron (HBI), as well, which barely re-oxidizes and can be easily
transported.

Kobe Steel's Direct Reduction Plant, using the MIDREX® DR Process, has been highly evaluated throughout the world in
response to the need for new iron making resources, in lieu of the Blast Furnace route, and is expected to be the core
engineering business for Kobe Steel.

 
  

Iron Ore Chemical Analysis

Chemical Property %
Total Iron 65 - 67 %
Sio2 + al2 o3 2-3%
Cao + mgo 1-2%
Sulphur 0.025 %
Phosphorous 0.045 %
Iron Ore Physical Analysis
Physical Property %
Size 6 - 40 mm
Moisture 3 % max
Slatter Index + 90 %
Reducibility Index + 92 %
Bulk Density 2.7 t / m3
Chemical Analysis of Iron Ore Pellets
 Total Iron 64 - 65 %
Si O2 + Al2O2 4-6%
CaO + MgO 2-3%
Sulphur 0.028 %
Phosphorous 0.045 %
Size 12 - 16 mm
Avg. Cold cr. Strength 200
Bulk Density 2.2 t / m3
Typical Chemical Analysis of the Natural Gas
Constituent % After reformation
Nitrogen 0.3 - 1.0 % Co + h2 - 90 %And
above
Carbon dioxide 0.1 - 5 %
Methane 85 - 93 %
Ethane 3-8%
Propane 1-4%
Typical Analysis of Sponge Iron of Gaseous Process
Total Iron 92 %
Metallic Iron 81 - 85 %
Metallization 85 - 93 %
Gangue 6-8%
Carbon 1.2 - 2.5 %
Sulphur 0.003 % max
Phosphorous 0.06 % max

Coal­Based Process v/s Gas­Based Process 

»The present output of sponge iron in India is about 7 MT/year. Out of which 50 % output is based on
non–coking coal.
»Out of the 73 DRI units in India, 70 units are coal-based and the rest 3 are gas-based. Further the
capital cost for setting up of coal-based units is cheaper compared to Gas-based units. Gas deposits are
not fully explored and more over allocation of this industry is yet to be demarcated by the
government.
»DRI, nowadays used along with the scrap as a dilutants of tramp elements and also in some cases as
complete feedstock instead of scrap.
»It is cheaper, clean and rosily available raw material for making clean steel.
»Therefore DRI of coal-based process is of much relevance to steel manufacturing.
Comparison between Coal and Gas Based Product
No. Parameters Gas Based Coal Based
1. Metallization 85 - 93 % 88 - 92 %
2. Carbon 1.2 - 2.5 % 0.2 - 0.25 %
3. Size of the product Mostly uniform as pellets are Wide variation as lump ore is used (3-
commonly used 20) mm
4. Recitation Prone for re-oxidation unless Relatively more stable
briquetted
5. Melting in EAF Higher carbon content is Low carbon content. Extra carbon
advantageous for reducing required for reducing residual iron
residual iron oxide in S.I oxide.
6. L.D Converter Carbon content will be high. Carbon in the liquid metal is reduced
because of FeO content in S.I.
7. Bulk density MT/ m3 1.5-1.9 1.6-2.0
8. Non - magnetic (Char) Nil 0.3 to 0.5 %
9. % of usage of change mix in Max 30%. Up to 80 % in continuous charging
EAF
10. Yield 1-2 % will be more when 1-2 % will be less when compared
compare with coal based with gas based sponge iron.
sponge iron.
 

Applications: 
   

  » Sponge Iron is one of the most important and the basic raw materials required for the production of 
various steel/iron based products like TMT bars, D.I Pipes etc. 

» Sponge Iron is a part–substitute for steel scrap used for manufacturing steel by electrical arc furnaces 
and induction furnaces.  

» Steel melting scrap is primarily required for using as a feed material in all mini steel plant that use this 
scrap for melting in electric arc furnace/induction furnace to manufacture steel. 

» Sponge Iron is also good suitable material for using as a coolant in LD converters of the Integrated Steel 
Plants. 
   

Problems of Sponge Iron Industry:  

A panoramic view shows an industry with investments of over Rs 5000 crore contributing Rs 450 crore per
annum by way of taxes to the national exchequer saving substantial foreign exchange, employing directly and
indirectly nearly 1,25,000 people. On the other hand, it is also an industry, which is under tremendous viability
pressure, due to raw material availability and pricing constraints. Selling prices are determined by market forces
whereas all input costs are controlled by the Government. The problems of the Sponge Iron Industry can be
discerned only on further scrutiny.

• The cost of basic inputs like iron ore, coal & gas has steeply gone up
• All input costs (administered pricing) are higher in India than overseas
• Inputs/services for sponge iron production are mainly in government hands like
o Iron Ore - NMDC, OMC, etc
o Non Coking Coal - Coal India Limited
o Natural Gas - ONGC/GAIL
o Transportation - Ministry of Railways
o Power - State Electricity Boards
• High cost of capital
• Slowdown of economy, resulting in demand recession
• Availability of right grade and quality of non-coking coal is a must to optimize cost of production of
sponge iron. Indian coal having high ash content (30 - 35 per cent) will necessarily have to be blended
with imported low ash content coal (below 12 per cent). Therefore reduction of custom duty on non
coking coal (below 12 per cent ash content) for metallurgical use from 25 per cent to 5 per cent is
necessary
• High prices of natural gas in comparison to international prices and cost of production resulting from
high input cost and inadequate export incentives

Typical Specifications of Sponge Iron: 
 
The Specifications for sponge Iron changes from plant to plant.  
The typical Specifications examples from a sponge iron plant:  
 

Example1: 
Sponge Iron India Limited
(An Undertaking of the Govt. of India and the Govt. of Andhra Pradesh)
Regd Office:10-3-311/A,6th Floor,Castle Hills,MasabTank,Hyderabad-500 028.India.
Phones:+91-040-23535156,+91-040-23534716,Fax:+91-040-23535531

TECHNICAL SPECIFICATION OF PRODUCTS

SPONGE IRON SPONGE IRON SPONGE IRON
LUMPS BRIQUETTES FINES

CHEMICAL PROPERTIES
(Only Magnetic Portion)
Degree of Metallisation 88 + or -2% 85% Min 80 + or -2% Max.
Total Iron +91% 88+ or - 2% Min 85% Max.
Carbon 0.25% Max. 0.8 - 1.3% Max. 1% Max.
Sulphur 0.04% Max. 0.04% Max. 0.04% Max.
Phosphorus 0.06% Max. 0.06% Max. 0.06% Max.
Sio2 + Al2O3 6% Max. 6% Max. 6% Max.
CaO + MgO 1% Max. 1.35 % Max. 1% Max.
Char & Other process Contaminants 1% Max. - 2% Max.
Size 3 to 20 mm 36*32*16 mm 0 to 4 mm
PHYSICAL PROPERTIES . . .
Density - 3.5 to 4.0 g/cm3 -
 Cold Crushing Strength - +300 Kg/Cm2 -
Shatter Index - +80% -
Undersize arising during trenait(-3mm) 5% Max. 5% -

Example2: 

BEEKAY STEEL INDUSTRIES 

Sponge Iron Organizations in India: 

Sponge Iron Manufacturers Association (SIMA)      http://www.simaindia.org/ 

As on date, SIMA has a membership of 54 sponge iron manufacturing units. These include 3 gas based and 51 coal based 
units. 

For further updates see, 

Blog: 

Data Bank: http://www.esnips.com/user/mrajesh