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SPONGE IRON INDUSTRY IN INDIA SCOPE FOR

CLEAN TECHNOLOGY

Amit Chatterjee
Adviser to the MD
Tata Steel

THE ENVIRONMENTAL COMPLIANCE ASSISTANCE CENTRE,


WEST BENGAL, DURGAPUR, 26TH MARCH 2009

WORLD STEEL: PRODUCTION AND DEVELOPMENTS


1140

Secondary CC slabs
Metallurgy

980

Million Tonnes

820

Economic
Developments BOF

660

CC
Billets

500

Eco
Efficiency

Customer
Engineering
Cost Management

Quality
Hot Strip Mill

340
180

CC thin
slabs

Business
Developments

EAF
Mass Production

Year

2005

2003

2001

1999

1997

1995

1985

1975

1960

1940

1920

1900

20

Eco Efficiency is the primary focus since 1995.


Steel industrys future would critically depend on this factor.

GLOBAL TREND IN DRI PRODUCTION


80
67.2

Production (mt)

59.8
56.1

60

49.45
45.1

40

33.25
27.37
20.51

20

37.09

43.2
38.6

54.6

40.27

36.18
30.67

17.68
23.65
19.32

0.79
1970

1992

1995

1998

2001

2004

2007

Year

Growth of direct reduction technologies all round the world has


been extremely significant.
World DR production has jumped from 0.8 Mt in 1970 to around
67.2 Mt in 2007. The steel industry has not always done well in
this period, but DR has progressed DRI is a vital material now

DRI PRODUCTION IN INDIA


Production (mt)

25
20.1

20

16.27
15
10
5
0.2

1.3

2.3

4.2

7.1
5.3
6.5
5.4

10.06
8.1

11.82

0
89- 91- 93- 95- 97- 9990 92 94 96 98 00

01- 02- 03- 04- 05- 06- 0702 03 04 05 06 07 08

Year

Growth of DR industry till mid 1980s was slow because of restrictive


licencing.
After 1985, this industry has exploded from 0.2 Mt in 89-90 to
20.1 Mt in 07-08.

India is now the largest producer of DRI in the world.

GLOBAL DRI PRODUCING COUNTRIES (2005-07)


Country

India
Venezuela
Mexico
Iran
Trinidad & Tobago
South Africa
Canada
Saudi Arabia
Russia

2005

Production, Mtpa
2006

2007

11.1
8.95
5.98
6.85
2.25
1.78
0.59
3.63
3.34

14.7
8.6
6.2
6.9
2.1
1.8
0.5
3.6
3.3

19.06
7.7
6.3
7.4
3.5
1.7
0.9
4.3
3.4

Indias position as the largest producer of DRI in the


world has been consolidated over the last 3 years.

PROCESS-WISE BREAK UP OF GLOBAL DRI


PRODUCTION
HYL /
Energiron
16.80%
Other gas,
1.60%

Coalbased
22.60%

Midrex,
59.10%

% of total

2006

2007

Midrex

59.7

59.1

HYL/Energiron

18.4

16.8

Other gas

2.2

1.6

Coal-based

19.7

22.6

Total DRI production


2006
2007

59.8 Mt
67.2 Mt

DRIs contribution is very small to


total world steel (>1300 Mt)

Globally, Gas-based DR processes dominate Coal 20-23%

GROWTH OF COAL-BASED VIS--VIS


GAS-BASED DRI PRODUCTION (INDIA / ROW)

BREAK-UP OF INDIAS DRI PRODUCTION


5.9

17

Coal

5.3

Gas

Production, Mt

15

4.3

13

4.19 4.5

11
9
7

2.9 3.3

3.4

3.6
3.4

3.26
3.45

3.62

14.2
11

5
3
1

3.24 3.28 3.9


1.95
2.03
1.9
1.55 1.75 1.93

95-96

97-98

5.6

7.5

99-00

01-02
03-04
05-06
07-08
Year
Year
Initially, gas based processes were
adopted.
Coal based DRI then became gradually become more popular.

Today, DR production through Coal-based processes is


almost 70% reverse of rest of the world.

DETAILS OF DRI PRODUCTION IN INDIA


Year

Installed capacity, (Mt)


Gas
based

Coal
based

2004-05

6.1

6.0

12.1

2005-06

6.1

8.5

2006-07

7.1

2007-08

2008-09

Production, (Mt)

Total Gas based

Coal
based

Total

4.6

5.5

10.1

14.6

5.7

6.5

12.2

11.0

18.1

7.0

8.5

15.5

7.1

13.0

20.1

7.0

10.0

17.0

7.1

15.0

22.1

7.0

11.0

18.0

2009-10
7.1
18.0
25.1
7.0
14.0
21.0
Three large gas-based units (Essar Steel, Ispat Industries and Vikram
Ispat) have capacities of 3.60, 1.60, and 0.9 Mtpa.
Over 700 coal-based plants with capacities ranging from 30-400 ktpa
are in operation in Orissa, Chattisgarh, Jharkhand and West Bengal.

As India consolidates its position as the world


leader in DRI, coal-based plants will predominate. EAFs
and even ISPs will use DRI.

HOW STEEL IS MADE IN INDIA (Mt)


Route

2003-04

2004-05

2005-06

2006-07

BF-BOF

19.8

19.8

21.7

22.2

EAFs

8.2

10.2

11.3

13.3

IFs

6.0

8.2

13.5

15.4

Total crude steel

34.3

38.5

46.5

50.9

Share of
EAF/IF,%

41.6

48.0

53.3

56.4

Despite problems with quantity/quality of electricity,


contribution of EAFs/IFs in total production has
increased over the years and reached almost 50% in
recent times. DRI usage will certainly keep increasing.

UNIQUE FEATURE OF INDIAN DR INDUSTRY


In India, unlike in many other countries, both coal and natural
gas have been used.
First coal and then natural gas had been predominant -- today
coals share is 70%, while in ROW gas is 75-80%.
Installation of a large number of small coal-based rotary kilns
plants uneconomical in ROW is another distinctive feature .
These units often have induction furnaces capable of directly
using DRI fines below 3mm.
India is the only country in the world using IFs on such a large
scale to produce steel in the secondary sector. Reason?
Many mini-mills have shutdown their EAFs and installed IFs of 1
to 20 t capacity.
Melting has been optimised to even produce low phosphorus
and low sulphur steel of high quality.
Upto 30% DRI has been continuously charged in IFs without
changing the normal operating procedure; in some furnaces,
upto 85% DRI has been used. Kudos to an Indian innovation.

ESTIMATE OF FUEL RESERVES IN INDIA AND


FORESEEN LIFE
Type

Calorific
value,
kcal/Nm3

Years of
life

Petroleum
Natural gas
Coal

11,500
8500
1400

40
65-70
165-170

Unit price,
$/thousand
kcal
6.25
3.88
1.75

Both from longevity as well as price viewpoints,


coal has advantages. Availability of coal remains
a question mark.

PRESENT AND FUTURE INDIAN COAL SITUATION

Import of coal in large tonnages is necessary in long run.

RECENT TREND IN IMPORT OF NON COKING


COAL INTO INDIA

CHINA, 1%
INDONESIA,
34%

SOUTH
AFRICA, 65%

FUTURE OF DR INDUSTRY IN INDIA


Gas price and gas availability would be critical for gas-based
plants. Gas price very likely to increase. Economics ??
Availability of appropriate coal would decide the future of coalbased plants. Washing of non-coking coal will be necessary to
cater to total DRI demand.
Import of non-coking coal from Australia, SA, etc will
supplement demand.
Ecology in Indias coal-based plants has NOT always received
attention. Requires nation-wide focus to ensure sustainability.
Rotary kilns using coal and shaft furnaces using natural gas will
be supplemented by fluidised bed, multi-hearth and rotary
hearth furnaces to treat fine materials even in integrated plants.
Gas generated from coal and gas from other sources (CBM, etc.)
likely to play important role.

COAL VS GAS-BASED DR TECHNOLOGIES


Gas-based DR involves gas-solid reactions faster at lower temp.
Cracking of natural gas produces both CO and hydrogen hydrogen,
is a better reductant, DRI then has higher metallisation.
The nascent carbon available from the cracking combines with iron to
form Fe3C and carbon contents between 1.0-2.5% can be obtained.
Coal-based DRI irrespective of the operating conditions has carbon
content between 0.10 to 0.12%.
Higher carbon in DRI gives advantages in steelmaking lower melting
point, higher opening carbon in the bath, etc.
Gas-based DRI is produced at 950-980oC -- porosity is greater,
tendency towards re-oxidation and even self-ignition in extreme cases.
Coal-based DRI is produced at 1050-1080oC -- an outer slaggy layer
protects the DRI from re-oxidation.
Coal-based DR plants are smaller in size (maximum 500 tpd) -- lower
total capital investment but specific investment/tpa is higher.

Gas-based technology is intrinsically cleaner; coalbased DR plants have to contend with fine coal as dust
as well as extensive waste generation.

POLLUTION HAZARDS IN DRI PRODUCTION


Sponge Iron plants release hazardous pollutants like
cadmium, nickel, hexavalent chromium (most
dangerous through air and water), arsenic,
manganese, and copper. The heavy metals in these
particulate matters are most dangerous and cause
quick damage to fruit bearing trees, agricultural
harvest and the human body, especially the lungs.
To control pollution in sponge iron industries, Central
Pollution Control Board has put down the norms to be
followed.

Unfortunately these norms exist only on paper.

Very little actual pollution control is visible.

KYOTO PROTOCOL: GLOBAL STEEL INDUSTRY


Kyoto Protocol will soon become effective.
Global climate policy will further constrain and complicate
decision-making in steel business.
The world average of 1.7 tonnes of CO2 per tonne of crude
steel reflects a mix of integrated and electric arc furnace
production.
EAF not much superior when electricity generation is
included, but pollution abatement will cost more in ISPs.
CO2 abatement = reduction in energy consumption. Average
19 GJ energy required per tcs. India higher by 25-35%.
Only major evolution in technology can lower energy.
Room for energy reduction in developed countries EU, USA,
Japan, etc. minimal. Must be done in emerging regions.

IMPORTANT INSIGHTS TO CONSIDER


Industry accounts for 36% of global CO2 emissions. CO2
emission mainly from primary materials production.
Energy intensive industries have made strides to improve
efficiency, but overall industrial energy usage continues
to grow strongly, particularly in the emerging economies.
Large energy efficiency potential remains and moving to
best practice would save 1.9 to 3.2 Gt CO2 each year
(7-12% of total global emissions).

Key areas for efficiency gains include chemicals,


iron and steel, cement, motor systems, combined
heat and power.

STEEL IS A CRITICAL INDUSTRY FOR IMPROVEMENT

LEGISLATIVE ACT ON MINIMUM CO2 REDUCTION


Act is under formulation to include the following:

Contain CO2 emissions in 2050 to same level as


2005.
Provide incentive of USD 50/t CO2 worldwide.
This would be consistent with +3 degrees C.
This implies a significantly adjusted energy

system.
Not the best solution; but tolerable.
Conformation to this ACT NOT a matter of choice.
IT IS THE ONLY MEANS OF SURVIVAL.

BLUE CASE: STRICTER NORMS


CO2 emissions in 2050 to be half of the level of 2005.
This could be consistent with 450 ppm (depending on
post-2050 emissions trends).
Incentive of USD 200/t CO2 needed worldwide.
Blue is only possible if the whole world participates

fully.
This implies a completely different energy system.

This option is ideal, but extremely difficult. It has to


be followed worldwide without exception. Indian DR
(coal-based) industry will be scrutinised.

EMISSION REDUCTION REQUIRED IN DIFFERENT


SECTORS IN 2050 COMPARED TO 2005
ACT Map,
%

BLUE Map,
%

Power generation

-60

-89

Transport

63

-8

Industry

49

-26

Other fuel transformation

-38

-78

-50

Total

Power generation will require maximum attention;


closely followed by fuel transformation.

CO2 IN WORLD STEEL INDUSTRY: PRESENT


AND FUTURE
20000

Mt CO2

15000

10000

5000

0
2005

2030 (if no
change is
made)

Industry - direct emission


Process CO2
Indirect CO2 upstream savings

2050 (if no
change is
made)

2050 (if the Act


stipulations are
followed)

2050 (if the


Blue Case is
adopted)

Coke ovens and blast furnaces


Indirect CO2 upstream emissions

ENERGY IN WORLD STEEL INDUSTRY


Biomass and waste
Heat
Electricity
Gas
Oil
Coal

1400
1200

Mt / year

1000
800
600
400
200
0
2005

2030 (if no
2050 (if no
2050 (if the Act
change is made) change is made) stipulations are
followed)

2050 (if the Blue


Case is adopted)

Coal is and will be the major energy source

CO2 EMISSIONS AS A FUNCTION OF SOURCE OF


ENERGY
Energy source

CO2 Emissions
(t/TJ)
(lbs / MM Btu)

Natural gas (CH4)

49

115

Bituminous
metallurgical coal

90

212

Bituminous coal

94

220

Natural gas is a much cleaner energy source than any


type of coal. However, both coal and NG used in DR.

MAIN DRIVERS WORLDWIDE


250
Production

Index 100 = 2005

200

Energy
CO2

150
Energy
Intensity
100

CO2
Intensity

50

0
2030 (if no
change is
made)

2050 (if no
change is
made)

2030 (if the


Act
stipulations
are
followed)

2050 (if the


Act
stipulations
are
followed)

2030 (if the 2050 (if the


Blue Case is Blue Case is
adopted)
adopted)

Total CO2 , Energy Intensity and CO2 Intensity will be


the main factors requiring attention.

CO2 EMISSION IN STEEL PROCESSING (t per tcs)


Steel excellent material in terms of sustainability can be
infinitely recycled without loss of quality.
Steel from ore produces 1.54 t CO2 per tonne of crude steel
globally; 2.4-2.6 t CO2 in India.
EAF steelmaking using recycled scrap generates only 0.68 t
CO2.

Primary process,
1.54 t

Reduction,
0.86 t

Recycling
0.68 t

Tonnes of CO2 per tonne of input

CO2 EMISSIONS (t/t product) FOR


STEEL, ALUMINIUM AND COPPER in 2007
12

10.6
9.87

10

Primary process
Recycling process
Reduction

8
5.5

3.52

4
2

1.54

1.95
0.68 0.86

0.73

Steel

Aluminium

Copper

Steel is the least CO2 generating metal.

CO2 EMISSION IN SELECTED COUNTRIES


Rank

Country

Qatar

Emissions
(000 t/1000 people)
42.96

United Arab Emirates

29.10

3
4

Kuwait
Bahrain

26.80
26.65

5
9
79

United States
Canada
China

19.84
16.18
2.69

116

India

0.96

In terms of CO2 emission per inhabitant: China is 79, and


India 116.

Only because of population.

Total CO2 Emission: India vs. Others


Rank

Country

Total Emission (000 t)

United States

5,762,054.0

China

3,473,597.3

3
4

Russia
Japan

1,540,365.0
1,224,737.4

India

1,007,978.9

6
7

Germany
United Kingdom

837,424.8
558,225.1

Total CO2 emitted in India is very high. Future steel


production could be limited by this factor CO2
emission t / t of steel, 2.9-3.1 in India; 1.4-1.6 in World.
EC considering CO2 penalty for steel industry (150-200
USD/t CO2 ).

GLOBAL CO2 EMISSIONS : THE CHALLENGE


FROM CHINA AND INDIA

CHINA

ENERGY REQUIREMENTS AND CO2 EMISSIONS


FOR VARIOUS STEELMAKING ROUTES
18
16

2500

18.1
16.8

16.6
2000

1959

14
10.8

12
10

1140

8
6

10.6

1500

1175

1033

1000

6.3
713

4
2

11.6

784
468 500

0
BF-BOF

80% 80% Hot 30% 30% HBI30% pig 100%


Cold DRI DRI Cold DRI
iron
Scrap

kgCO2/tls

GJ/tls (Total energy)

20

EXTENT OF POLLUTION IN INDIAN DR INDUSTRY


DR industry grew in haphazard manner. DR plants are relatively easy to
set up. Liberalised financial support coupled with low-cost technology
encouraged many entrepreneurs not familiar with the iron and steel
business to enter this field. Initial investment of Rs 7-12 crores on a 100
tpd sponge iron plant, can be recovered within just 12-18 months.
For every 100 tpd of sponge iron produced, the consumptions are:
160-175 tonnes of iron ore,
120-150 tonnes of coal,
3.5-5 tonnes of dolomite and
2.0-2.2 tonnes of water.
Generations from the kiln are:
1.8-2.0 tonnes of carbon dioxide.
10-15 tonnes of dust from pollution control equipment
2.5-3.5 tonnes of kiln accretion (expressed on per day basis)
25-30 tonnes of char as solid wastes.

The total solid disposal load per 100 tpd DRI production can be as
high as 40-50 tpd.

TOTAL POLLUTION IN INDIAN SECONDARY


SECTOR
Mini coal based sponge iron units (more than 700 kilns)
each producing less than 100 tpd, operating without much
(sometimes any) pollution control equipment (proper GCP,
effluent water treatment, etc).
940 Induction Furnaces with a total installed capacity of
9.86 mtpa have very few pollution abatement measures.
1192 Re-Rolling units with a total installed capacity of
around 24 Mtpa are not all environment conscious.
Future Indian steel expansion after Kyoto protocol (WTO)
may be constrained unless it is GREEN. Pollution control
measures will add 20-30 % to Capex.

This is a major concern unless addressed vigorously.

GUIDELINES FOR CONTROLLING STACK


EMISSIONS FROM ROTARY KILNS
Adequately designed ESP (or any other adequate air pollution control
system) should be installed to achieve the prescribed standards.
Installation and operation of pollution control equipment for plants
less than 100 tpd may not be economic. Therefore, such plants should
NOT be permitted in future. Phasing out old plants is a must must be
worked out by the State Pollution Control Boards.
All pollution control equipment to be provided with separate electricity
meter and totalisers for continuous recording along with the amperage
of the ID fan.
Timely collection/removal system of the flue dust generated in ESP.

Guidelines can be made. Whether they are religiously


followed, depends on each plant. Spirit is important if
this industry has to survive. Otherwise, .

CLEAN TECHNOLOGY

SPONGE IRON INDUSTRY

THANK YOU

DURGAPUR, WEST BENGAL


26TH MARCH 2009