Cover Story

May 2013 32
Indian Ferro
Alloys Industry :
An Overview
erro Alloys are special alloys of iron containing
some additional chemical elements like Mn, Si, Cr,
F
C etc. Ferro Alloys are vital additives that are used
in steel making as deoxidants and also as alloying
agents. These are added in steel production not only
for de-oxidation but also for grain size control for
improvement in the mechanical properties of steel.
Depending upon the process of steelmaking and the
type of steel being made, the requirement of different
Ferro Alloys varies widely. The principal function of ferro
alloys addition to steel increases its resistance to corrosion
and oxidation, improve its Hardenability, tensile strength at
high temperature, wear and abrasion resistance with added
carbon and increases other desired properties in the steel such
as creep strength etc. Ferro Alloys are vital inputs for producing
all types of steel and are used as raw material in its in the
production of alloys steel and stainless steel.
Demand Drivers of Ferro Alloys
The demand drivers of ferro alloys
are :
lCrude steel production
lAlloy and special steel production
lStainless steel production
Types of Ferro Alloys
BULK Ferro Alloys
HC Ferro Manganese, MC Ferro
Manganese, LC Ferro Manganese,
Si l i co Manganese, MC Si l i co
Manganese, Ferro Silicon, HC Ferro
Chrome / Charge Chrome, LC Ferro
Chrome.
NOBLE Ferro Alloys
Ferro Molybdenum, Ferro Vanadium,
Ferro Tungst en, Ferro Si l i co
Magnesium, Ferro Aluminium, Ferro
Silico Zinconium, Ferro Titanium, Ferro
Boron, Ferro Nickel Magnesium etc.
Capacities & Production of Ferro
Alloys in India
The Ferro Alloy industry was
thrown open and liberalized during
1991-92. As a result, a number of small
and medium units having transform
rating of 2.5 MVA to 16.5 MVA
emerged in production of Buck Ferro
Alloys, particularly in the states of
Chattisgarh, Madhya Pradesh, West
Bengal, Kerala, Pondichery, Goa,
Jharkhand and Meghalaya.
C a p a c i t y a d d i t i o n a f t e r
liberalization, as on date as estimated
by IFAPA, is about 2,300 MVA which
has resulted an increase in transformer
capacity to about 2,900 MVA and by
tonnage it has crossed 5.15 Mt in 2010-
11 a break up of which is shown below :
Raw Materials
The country has reasonable
reserves of Manganese Ore and
Chromium Ore to meet the requirement
of Bulk Ferro Alloy industry, if the
Policy of Conversion of minerals by
using beneficiated low grade ores is
followed.
Manganese Ore
The Al l -I ndi a reserves of
Manganese ore as per Indian Bureau of
Mines Survey Report of 01.04.2010
(provisional) were :
Reserves : 141.977 Mt
Remaining Resources : 288.003 Mt
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May 2013 33
Type of Alloys Capacity (Mt)
Production During
2010-11 (P) in Mt
Capacity
Utilisation (%)
Manganese Alloys
Chromium Alloys
Ferro Silicon
Noble Ferro Alloys
Total
3.16
1.69
0.25
0.05
5.15
1.70
1.04
0.12
0.03
2.89
54
62
48
60
56
Total Resources : 429.980 Mt
Production of Manganese Ore in
2010-11 was about 2.86 Mt.
Based on I BM' s Report of
01.04.2010, the requirement of
Manganese Ore for the Indian Ferro
Alloy industry, will be available
domestically for 20 years (excluding
the Inferred Reserves).
Production of Manganese Ore in
India between 2006-07 and 2010-11
are shown below :
Year
Production
(Mt)
% Change
2006-07
2007-08
2008-09
2009-10
2010-11 (P)
2.10
2.70
2.80
2.44
2.86
==
28.57
3.70
(-) 12.86
17.21
Exports & Imports of Manganese
Ore by India between 2006-07 and
2010-11 are furnish below in tonnes :
Year Export Import
2006-07
2007-08
2008-09
2009-10
2010-11
157,312
208,372
205,424
289,468
117,963
284,202
686,053
852,198
797,933
1,209,640
Major reserves of Manganese Ore
are of BF grade and OCCURS in
Maharashtra, Odisha, Madhya Pradesh,
Karnataka, Jharkhand and Goa.
Manganese is an essential requisite
for steel production due to its special
capability of sulphur fixing, deoxidizing
and good alloying properties.
For production of one tone of ferro
manganese, inputs required are : 2.6
tonnes of manganese ore, 0.5 tonnes of
reductant and 3MWH of electricity.
Silico Manganese is produced by the
reduction of manganese ore, quartzite
and manganese slag with coke.
Stainless steel accounts for about 6
percent of the total production of ferro
manganese and silico manganese in
India. The average consumption of
manganese alloys by India's stainless
steel industry is about 105 kg per
tonne.
But the availability of high grade ore
is limited. Manganese Ore India Ltd.
(MOIL) commands around 50 percent of
the total resources of manganese ore
required by the manganese Ferro Alloy
industry. The industry is facing
problem of in supply of high grade
manganese or e. Due t o t he
monopolized status, pricing of high
grade manganese ore is controlled by
MOIL. Thus, due to the limited
availability of high grade manganese
ore, the Ferro Alloy Industry is
compelled to source high quality ores
through imports. According to experts,
MOIL's price of manganese ore is
always higher than the ore of the
international suppliers.
Chrome Ore or Chromite
The All-India reserves of Chrome
Ore (ore Chromite) as on 01.04.2010
were as follows :
Reserves : 53.970 Mt
Remaining Resources : 143.376 Mt
Total Resources : 203.346 Mt
Based on the Survey Report of
I ndi an Bureau of Mi nes, t he
requirement of Chrome Ore will be
available domestically for next 15
years (not including inferred).
Production of Chromite in India
between 2006-07 and 2010-11 are
shown below :
Exports and Imports of Chromium
Ore by India between 2006-07 and
2010-11 are presented below in '000
tonnes.
To support the Ferro Chrome

Year
2006-07
2007-08
2008-09
2009-10
2010-11 (P)
Production
('000 tonnes)
% Change
5296
4873
4073
3143
4262
==
(-) 7.99
(-) 16.42
(-) 22.83
35.60
Year
2006-07
2007-08
2008-09
2009-10
2010-11
Export Import*
1203
907
1899
689
173
5
121
94
96
86
industry, export of chromium ore /
concentrate are being brought down
over the year. In order to produce the
desired grade of Ferro Chrome and also
to maintain the desired charge mix, the
industry imports lumpy ore to blend
with domestic low grade ore /
concentrate. Presently, the industry is
using chrome concentrates to the
extent of 50 percent of the requirement
per annum.
Supply of Chrome Ore is Erratic
Odisha alone producers over 97
percent of chrome ore in the country.
The sole and major supplier of chrome
ore to the country's Ferro chrome
industry is the Orissa Mining
Corporation (OMC) which has a control
over 80 percent of the chrome ore
leases in Odisha. The industry
maintains that proper allocation is not
taking places and the units outside
Odisha are suffering. The supply of
chrome ore is inadequate and the
industry, therefore, depends on
imports.
India is the third highest global
producer of chrome ore. Chromium ore
or chromite is used mainly in
metallurgical industry for manufacture
of ferro alloys such as Ferro chrome,
charge chrome and silico chrome which
are used as additives in making
stainless steel and special alloy steel.
Chromi um i mports strength,
hardness, toughness, magnetism and
offers resistance to abrasion, corrosion
and acts as a deoxident.
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May 2013 34
The use of chromium in steelmaking
depends on the end-use purpose. Low
chromium steels with less than 5
percent chromium and small quantities
of nickel is used in the production of
rails, automobiles, armoured plates etc.
I nt er medi at e chr omi um st eel
containing upto 12 percent chromium
along with small quantities of tungsten,
molybdenum or silicon are used in high
speed valves for engines and
equipment which require resistance to
abrasion, corrosion and oxidation. High
chromium steels are stainless and
super stainless steels that are used for
manufacture of cutlery, cooking
utensils, aircrafts, high speed trains
etc.
Raw Materials for Noble Ferro Alloys
For producing Noble Ferro Alloys,
most of the raw materials are procured
indigenously.
However, for producing Ferro
Molybdenum, the raw material
molybdenum ore is imported in full as
the same is not available in India. Steel
industry also directly imports Ferro
Molybdenum the finished product
instead of ore for their use. According
to experts, some of the Mini Steel
Plants used molybdenum ore directly in
their furnaces.
The raw materials for producing
Ferro Vanadium is Vanadium Pentoxide
which is generally extracted from the
Aluminium Sludge and about 45-50
percent of the industry's requirement is
imported in the form of Vanadium
Sludge, Vanadium Concentrates,
Vanadium Compounds and Aluminium
Metavandate.
The total imports of Noble Ferro
Alloys in 2010-11 was 218,401 tonnes.
Major imports were : Ferro Phosphorus
1748 tonnes, Ferro Titanium 1658
tonnes, Ferro Silico Magnesium 1597
tonnes and Ferro Niobium 1432
tonnes.
Major Ferro Alloys Producers in
India
The names, locations and product
mix of some major Ferro Alloy
producers in India is shown in Table 1.
New Projects & Expansions
The names of some new Ferro
Alloys projects under planning and
Name of Producer & Location Product Mix
Ferro Alloy Corporation Ltd., Vijanagram, AP Ferro Manganese, Ferro Chrome
Chadrapur Ferro Alloys Plant, Chandrapur,
Maharashtra, SAIL
Ferro Manganese, Silico Manganese
Universal Ferro & Allied Chemicals Ltd., Bhandara,
Maharashtra
Ferro Manganese, Silico Manganese,
Ferro Silicon
Sandur Manganese & Iron Ore Ltd., Hospet, Karnataka Ferro Manganese, Ferro Chrome
Ispat Alloys Ltd., Balasore, Odisha Ferro Manganese, Ferro Chrome
JCFA Corporation Ltd., Khandelwal Nagar, Maharashtra Ferro Manganese, Ferro Chrome
*Indian Charge Chrome Ltd., Chaudwar, Odisha Charge Chrome, Ferro Chrome
Ferro Alloys Corporation Ltd., Balasore, Odisha Charge Chrome, HC Ferro Chrome
*Indian Metals & Ferro Alloys Ltd., Rayagara, Koraput,
Odisha
Ferro Chrome, Charge Chrome,
Ferro Silicon
*Tata Steel Ferro Alloys Plant, Bamnipal, Kendhujhar,
Odisha
HC Ferro Chrome, Charge Chrome
Tata Steel Ferro Alloys Plant, Rawmet, Odisha
Jindal Ferro Alloys Ltd., Kothavasala, AP
Tata Steel Ferro Alloy Plant, Goda, Odisha
Jindal Stainless Ltd., Raigarh, Chattisgarh
New Chrome Ltd., Raigarh, Chattisgarh
Ferro Chrome Ltd., Odisha
VISL, Bhadravati, Karnataka, SAIL
Nova Bharat Ferro Alloys, Polancha, A.P.
Rohit Ferro Tech Ltd., Bankura, W.B.
MB Ispat Corporation, Burdwar, W.B.
VBC Ferro Alloys, Rudram, Medak, AP
Jeypur Super Ltd., Jeypur, Odisha
HC Ferro Chrome
Ferro Chrome
Silico Manganese, Ferro Manganese
Ferro Chrome
Ferro Manganese, Silico Manganese
Ferro Chrome
Ferro Chrome
Ferro Chrome, Silico Manganese
Ferro Chrome
Ferro Manganese, Silico Manganese
Ferro Manganese, Silico Manganese
Ferro Chrome
Table 1 : Names, Locations and Product Mix of Some Major Ferro Alloy
Producers in India
expansion of the existing ones are
mentioned below :
lIdeal Resources Ltd. is planning a
105,000 tpy ferro manganese and
75,000 tpy of silico manganese
p r o d u c t i o n p r o j e c t i n t h e
Visakhapatnam district of Andhra
Pradesh at an estimated cost of Rs. 400
million. The project is scheduled for
competition in 2013.
lLanco Industries is building a
10,000 tpy ferro alloy production
project in the Chittoor district of
Andhra Pradesh. The project is likely to
be operational in 2013.
lMisirlal Mines of Misirlal Jain
Group, has planned a 3 Phase ferro
chrome manufacturing expansion
project at Pankpal in the Jaipur district
of Odisha. The three phases are likely
to be completed within 36 months from
zero data.
lWook Silicon Alloys has planned a
22,000 tpy capacity plant in the Nellore
district of Andhra Pradesh. The project
is scheduled for commissioning in 18
months from zero date.
lLa k s h mi Me t a l l u r g y i s
implementing a 32,400 tpy ferro alloy
plant at Renugunta in the Chittor
district of Andhra Pradesh at an
investment of Rs. 340 million.
lMid India Power and Steel Ltd.,
belonging to Ruch Group is planning a
12,000 tpy ferro silicon, 28,500 tpy of
silico manganese and 37,000 tpy of
ferro manganese plant in the Anuppur
district of M.P.
lPadma Iron products is planning a
ferro alloy plant by installing a 3 x 9
MVA submerged are furnace at
Maheshpur Village in the Bardhaman
district of West Bengal at a cost of Rs.
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May 2013 36
600 million. The product mix are :
55,400 tpy of ferro manganese, 39,600
tpy of silico manganese anmd 19,800
tpy of ferro silicon.
lLanco Industries has planned a
ferro alloy plant in the Chittoor district
of A.P. under Srikalahasti Madal to
produce 25,000 tpy of ferro silicon,
60,000 tpy of silico manganese and
75,000 tpy of ferro manganese.
lSome other projects have also
been announced which are yet to get
environmental clearance or are
awaiting equipments to be procured.
Production of Ferro Alloy in India
Production of Ferro Alloys in India
between 2008 09 and 2010-11 are
shown in Table 2.
Despite various constraints, the Indian
Ferro Alloy Industry has recorded a
healthy overall growth in production of
Type of Ferro Alloys
Production During
2010-11 (P) 2009-10 2008-09
A. Bulk Ferro Alloy
HC Ferro Manganese
MC Ferro Manganese
LC Ferro Manganese
Silico Manganese
MC Silico Manganese
LC Silico Manganese
Ferro Silicon
HC Ferro Chrome / Charge Chrome
LC Ferro Chrome
390,000
8,000
6,000
1,250,000
24,000
25,000
117,000
1,030,000
2,000
341,883
8,222
6,018
1,066,485
24,108
25,454
97,682
890,916
2,007
372,286
8,386
5,775
889,334
24,087
22,368
110,742
790,072
1,352
Sub Total (A) 2,852,000 2,462,775 2,224,502
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
3,050
1,500
150
18,500
7,600
120
2,100
90
250
2,822
1,389
150
17,132
7,017
120
1,929
90
209
2,112
1,501
150
13,460
8,170
37
1,561
83
221
Sub Total (B)
Grand Total (A + B)
Growth Percentage (YoY)
33,360
2,885,360
15.70
30,858
2,493,633
10.74
27,235
2,251,737
(-) 6.75
Table 2 : Production Ferro Alloys in India : 2008-09 to 2010-11 (tonnes)
15.70 percent during 2010-11 over the
previous year.
Export of Ferro Alloy by India
India's exports of ferro alloys
between 2008-09 and 2010-11 are
shown in Table 3.
Imports of Ferro Alloys by India
India's imports of ferro alloys
between 2008-09 and 2010-11 are
shown in Table 4.
An analysis of the exports and
imports of Ferro Alloys by India shown
in Table 3 and Table 4 reveals the
following facts :
lThe value of exports earning by
the Indian Ferro Alloys industry during
the year 2010-11 at Rs. 133,915.10
million rose by a hefty 223.51 percent
over the previous year's figure of
41,394.46 million.
lThe share of exports in the
production of Ferro Alloys in 2010-11
has gone upto 77.64 percent in volume
terms over 34.60 percent in the
preceding year.
lThe excess of foreign exchange
earnings by exports of ferro alloys in
2010-11 at Rs. 133,915.10 million over
an outgo of Rs. 20,337.55 million on
imports during the same year was Rs.
113,577.55 million.
lThe percentage increase in the
import value of ferro alloys during
2010-11 was 34.10 over a negative
growth of 0.88 percent in the preceding
year.
Competitiveness of Indian Ferro
Alloys Industry
The competitiveness of the Indian
Ferro Alloys industry among the
leading producing countries is shown in
Table 5.
It is evident from the above table
that South Africa has the advantageous
availability in respect of ore (Chromium
Ore, Manganese Ore) while India and
the CIS countries have moderate
availability with China, Europe and
Japan have low availability of ore.
In the power segment, all the
countries mentioned in the above table
have moderate availability expect
Japan which has low availability.
In respect of reductants, which play
a vital role in the production of ferro
alloys, China and South Africa have
advantageous availability while India,
the CIS countries and Japan has
moderate availability and Europe has
low availability.
In logistics, China, the CIS countries
and Europe have advantageous
availability while India, South Africa
and Japan have moderate availability.
In case of labour, which has a
significant share in production cost,
India and China have advantageous
availability while the CIS countries
have moderate availability. South
Africa, Europe and Japan have low
labour availability. Overall, China has
the highest position in the vital factor of
ferro alloy production followed by
India, the CIS and South Africa.
Suggestions & Recommendations
of Indian Ferro Alloys Producers'
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May 2013 37
Product
Exports During
2010-11 (P) 2009-10 2008-09
Table 3 : Exports of Ferro Alloys by India : 2008-09 to 2010-11 (tonnes)
Bulk Ferro Alloys
Ferro Manganese :
Carbon Containing >2% by weight
Other Ferro Manganese
Ferro Silicon Containing >55% of Si
Other Ferro Silicon
Ferro Silico Manganese
Ferro Chromium :
Carbon containing > 4% by weight
Other Ferro Chromium
Charge Chrome
96,953
23,098
44,004
6,007
699,581
1,305,395
547
6
48,640
17,833
16,636
3,471
298,299
466,2189
5,734
==
101,289
20,244
27,939
9,228
300,421
488,700
2,974
1,001
Total (A) 2,175,504 856,882 951,796
Noble Ferro Alloys
Ferro Molybdenum
Ferro Tungsten
Ferro Titanium
Ferro Vanadium
Ferro Niobium
Ferro Phosphorus
Ferro Columbium
Ferro Silico Zirconium
Ferro Silico Magnesium
Ferro Boron
Ferro Silico Chromium
Others
2,719
15
45
169
1,815
233
46
26
3,988
1
50,475
5,308
1,766
1
5
30
116
11
1
1
3,597
3
==
356
888
3
2
387
192
169
==
24
3,295
2
26
3,303
Total (B)
Grand Total (A + B)
Value (Approx.) Rs. Million
Exports % of Production
64,840
2,240,344
133,915.10
77.64
5,887
8,62,769
41,394,.46
34.60
8,291
9,60,087
68,777.66
42.64
Association for Development of
Indian Ferro Alloy Industry
Electrical Energy (Power) and
Customs Duty
lUniform Electricity tariff should
be made available at internationally
comparable tariff for Ferro Alloy
Industry.
lUntil a level playing field on power
is given to the Ferro Alloy Industry the
Govt. should increase the Basic Custom
Duty to 7.5 percent from the existing 5
percent except on Ferro Nickel to avoid
cheap imports from other competing
countries. If this cannot be done, the
Govt. should reduce the basic customs
duty on raw materials i.e. ores
(Manganese Ore, Chromium Ore,
Molybdenum Ore) under Chapter 26
and Vanadium Pentoxide, Vanadium
Sludge, Ammonium Metavandate under
Chapter 28 to NIL for production of
Ferro Alloys to cater to the needs of
core sector steel industry.
lThe Govt. should devise a
mechanism for making funds available
to the Ferro Alloy Industry at a very low
or NIL interest rate for setting up
Captive Power Plants, which would
have the problem of paucity of capital
as well as reduce the interest burden,
thus bringing the cost of generation of
power to a level at which ferro alloy
production in India will be viable and
sustainable, considering the break
even FOB cost of the product from
other competing countries.
lThe industry should be allowed to
have a higher rate of depreciation (30
percent) for its Captive Power Plants.
This would provide the necessary tax
shield and enhance the attractiveness
of the project.
lElectricity Act, 2003 has allowed
Ferro Alloy Industry, to set up to
Captive Power Plants. The industry
transmit this power to individual
members' unit(s) without payment of
any surcharge and be charged only for
wheeling and transmission, at a low and
reasonable rate. And they should be
given captive Coal Blocks to do their
own mining to bring down its cost.
lThe Ferro Alloy Industry should
be exempted from paying Electricity
Duty on exports of Ferro Alloys as well
as on the electricity generation for
captive requirement and usage.
Ores and Mining
lThe idle Manganese and Chrome
Ore bearing areas, reserved for PSUS,
need to be de-reserved. The Govt.
should hand over the same for mineral
exportation to private parties with
requisite expertise. The Govt. should
initiate a comprehensive fast track
programme like Aerial Survey to look
into the potential deposits particularly
the Chrome Ore and Manganese Ore
deposits. The idle leases and new
leases of these ores need to be allotted
to Ferro Alloy producers.
lConsidering the projected
increase in carbon and stainless steel
production in future, it is suggested to
conserve the ore for domestic use. It is
also suggested that exploratory survey
for deposits below 100 meter depth are
intensified.
lAgglomerates, being consistent in
size and have uniform chemical
composition, are better than lump ore in
their reducibility and therefore, the use
of agglomerates lowers the specific
power consumption, as well as helps to
attain smooth furnace operation. There
is 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,
pelletisation process has to be
eventually introduced by the Indian
plants to reduce their costs by bringing
down the specific power consumption.
There is a need for suppliers to offer
l ower cost smal l er capaci t y
Pelletisation Plants, considering the
small and medium size furnaces in use.
lGovernment should sponsor
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May 2013 38
Product
Imports During
2010-11 (P) 2009-10 2008-09
Bulk Ferro Alloys
Ferro Manganese :
Carbon Containing >2% by weight
Other Ferro Manganese
Ferro Silicon Containing >55% of Si
Other Ferro Silicon
Ferro Silico Manganese
Ferro Chromium :
Carbon containing > 4% by weight
Other Ferro Chromium
Charge Chrome
Total (A) 200,582 172,843 117,372
Noble Ferro Alloys
Ferro Silico Chromium
Ferro Molybdenum
Ferro Tungsten
Ferro Titanium
Ferro Vanadium
Ferro Niobium
Ferro Phosphorus
Ferro Silico Zirconium
Ferro Silico Zirconium
Ferro Silico Magnesium
Ferro Boron
Others
Table 4 : Imports of Ferro Alloys by India : 2008-09 to 2010-11 (tonnes)
17,482
21,447
119,702
15,394
1,642
6,344
16,068
2,503
9,292
19,312
111,243
13,895
1,377
3,706
13,518
500
6,012
15,996
58,703
24,048
239
3,346
9,028
==
16
963
72
1,658
891
1,432
1,748
==
238
1,597
429
8775
6
1,111
20
1,843
881
769
1,138
4
189
1,523
263
7,363
==
840
45
558
242
1,779
1,336
10
115
3,833
198
6,420
Total (B)
Grand Total (A + B)
Total Value : Rs. Million
17,819
218,401
20,337.55
15,110
187,953
15,155.36
15,376
132,748
15,299.80
% Increase in Import Value
Import Duty
34.10 (-) 0.88 40.44
5% 5% 0%
Country
China
India
CIS
South Africa
Europe
Japan
ORE
1
2
2
3
1
1
Power
2
2
2
2
2
1
Reductants
3
2
2
3
1
2
Logistics
3
2
3
2
3
2
Labour
3
3
2
1
1
1
Overall
12
11
11
11
8
7
Table 5 : Competitiveness of Indian Ferro Alloy Industry vis--vis Other Leading
Ferro Alloy Producing Countries
research in collaboration with the Ferro
Alloy industry for beneficiation of low
grade Manganese Ores with high
Fecontent suitable for Manganese
Ores found in Eastern India.
lMines in the country are national
property. Therefore, the Govt. need to
instruct the state owned Orissa
Mining Corporation (OMC), to supply
chromium ores on equal proportion to
all the manufacturers of Ferro Chrome
i n t he count r y wi t hout any
discrimination. Preferences should be
discouraged.
Coal / Coke
lTo allocate coal linkage as well as
coal mines to the power plants of Ferro
Alloy industry as captive mines.
lThe Anthracite Coal Customs
Duty should be brought down to NIL
from existing level of 5 percent basic
duty.
Contribution of the Indian Ferro
Alloy Industry to Indian Economy
The contribution of the Indian Ferro
Alloy industry to the Indian economy
are mentioned below :
A Valuable Foreign Exchange Earner
India is a major Ferro Alloy exporter
and Ferro Alloy exports area a major
Foreign Exchange earner.
Foreign exchange earned by Ferro
Alloy industry by export of Ferro
Alloys between 2006-07 and 2010-11
are mentioned below :
Year
2006-07
2007-08
2008-09
2009-10
2010-11
Value (US $ Million)
364
1118
1547
880
2946
Earnings of Ferro Alloy Industry
Ploughed Back to Society
The industry has re-invested
profits into setting up captive power
plants, acquiring Coal Mines, Ore Mines
and spending a huge amount on Social
Development by setting up residential
complexes, schools, colleges and
hospitals etc., which has created
additional jobs for the people in the
remote areas in the states of Odisha,
Karnataka, West Bengal, Chattisgarh,
Cover Story
May 2013 39
Kerala and Andhra Pradesh where
Ferro Alloy industries are located.
Electricity Generation
Surplus of electricity generated by
the Ferro Alloy industry through
Captive Power Plants is also supplied to
the Grid, thus increasing the availability
of power in India.
Although the generation costs for
power is not high, the industry pays a
high tariff due to CROSS SUB
SPIZATION to Agriculture Sector, Low
Plant Load and high transmission and
distribution loses. The Ferro Alloy
units have to maintain a minimum
demand of 85 percent of power in their
operation. This clearly shows that the
industry has paid much more than the
normal power tariff applicable for this
industry, which provided substantial
revenue to the State and Central
Governments.
Industrailisation of Eastern and
Southern Region
Setting up of Ferro Alloy Plants has
helped in the growth of industrialization
of the states of Odisha, West Bengal in
the Eastern Region as well as of Andhra
Pradesh and Kerala in the Southern
Region.
Employment to People
It is estimated that a 50,000 tpy
capacity Ferro Alloy plant supports the
livelihood of about 750 families around
the plants which are usually located in
very remote areas where there is no
other major source of employment.
Constraints Faced by the Indian
Ferro Alloy Industry
High Cost of Grid Power
Electricity cost accounts for 40-70
percent of the total cost of production,
depending on the Ferro Alloy produced.
While the tariff on electricity in other
countries is a 1-5 cents / kwh, the same
in India is as high as 5-11 cents / Kwh.
Though raw material availability is
insufficient, the industry has highly
skilled manpower, latest technology,
which has given their recognition in the
global market but they are being priced
out primarily due to the high cost of
electricity. The industry has been
demanding for a level playing field by
the Govt. by supplying power at
internationally comparable tariff to the
highly power intensive Ferro Alloy
Industry.
High Raw Material & Input Cost
Non Availability of High Grade Ore
Manganese Ore
High Grade Manganese Ore is
mainly produced by Manganese Ore
(India) Ltd. (MOIL) which commands
about 50 percent of the total vital
manganese ore required by the
Manganese Alloy industry. The
inadequate supply of high grade ore
from MOIL is causing problems for the
industry. Also, MOIL's price of
manganese ore is always higher than
the price of imported ore. Due to the
limited availability of high grade
Manganese Ore, the industry is
compelled to source Manganese Ore
through imports.
Chrome Ore
Chrome ore is a key and vital input
for production of Chrome Alloys.
Orissa Mining Corporation an Odisha
state own industry is the only one major
supplier of Chrome Ore in the country.
Some Ferro Chrome units have Captive
Mines but they are not able to produce
the quality required for producing
Chrome Alloys. Hence, Ferro Chrome
producers, including those having
captive mines, are importing lumpy
Chrome Ore for blending with domestic
are for production of Chrome Alloys.
The industry has started consuming
Chrome concentrates of around 50
percent, at almost international price.
The Ferro Alloy industry, is also
facing the following problems :
lIncrease in Road and Railway
freight
lHigh Finance Cost
lShortage and irregular supply of
railway wagons
lPoor port facilities
lFree Trade Agreement (FTAs)
with many countries which has caused
reduction of Customs Duty or its total
exemption.
lIncrease in imports. The total
outgo of foreign exchange has
increased to Rs. 69,495 million
between 2006-07 and 2010-11. This
could have been avoided if the total
requirement, at least its lion's share
were procured domestic production by
utilizing the idle capacity of Indian
Ferro Alloy industry.
Conclusion
The Indian Ferro Alloy industry has
already invested over Rs. 60,000
million on capital goods, by way of plant
and machinery, employing lakhs of
people, directly or indirectly. The
present capacity of the Indian Ferro
Alloy industry, can comfortably cater to
the requirement of present domestic
steel industry to produce 120 million
tonnes.
Ferro Alloy is a power intensive
industry. The cost of power in India is
almost double of that in other countries.
The industry is demanding a level
playing field for supply of power at
internationally comparable tariff.
The supply of Manganese Ore and
Chrome Ore from MOIL and OMC
respectively, is inadequate and the
quality is often not of high grade. This
is compelling the Ferro Alloy producers
to resort to i mports causi ng
considerable outgo of valuable foreign
exchange.
The Govt . shoul d consi der
productively the suggestions and
recommendation of the Indian Ferro
Alloy Producers' Association and help
the industry to attain greater heights in
future.
Acknowledgement
Article by T. S. Sudaresan,
Secretary General, Indian Ferro Alloy
Producers' Association, published in
JPC's Performance Review, Iron &
Steel, 2010-11.