Insight into Indian DRI Industry: Summit Overview 2016

1. 3rd India International DRI Summit - 2016 at Hotel Shangri-La, New Delhi, INDIA on 19th August, 2016

2. Snapshot of Indian DRI Industry by DeependraKashiva Executive Director , SIMA

3. Genesis of Indian DRI Industry • India’s growth story started with the initiative of Ministry of Steel when they together with UNDP set up a demonstration plant at Paloncha in 1980 to test the suitability of Indian iron ore and coal for the production of the DRI. • DRI industry delicensed in 1985 with a sole aim to restrict imports of steel scrap to save precious foreign exchange. • On the initiative of GOI, three gas based DRI plants came into existence to utilize the natural gas of Bombay High which was being flared up .

4. No Greenfield natural gas based DRI/HBI plant came up after • 1994 (22 years) • Major growth in coal based sector from 2003-04 to 2008-09. • Domestic DRI capacity increased by about 280% in nine years during 2005-14 • Today India has world’s largest single location coal based and gas based DRI plants. • India is the only country in the world making DRI from coal gasification . • India is the largest DRI producer in the world for the last 13 consecutive years and accounts about 24.3% of world production.

5. Industry Profile 1. Number of Plants Gas Based 5 Nos Coal Based 369 Nos Total Plants 374 Nos 2. Capacity

6. Indian DRI/HBI Production

7. M I L L I O N T O N N E S ( Explain the trend )

8. DRI contribution to Indian steel production DRI/steel scrap - EAF/IF accounted for 56% of the steel produced in India in 2015-16

9. Challenges Before the Industry • Threat from the imports of steel melting scrap • Sluggish market • Shortage of natural gas

10. 1.Threat from the Imports of Steel Melting Scrap Steel scrap is not a manufactured product (waste generation), has flexibility to adjust the sales price to manipulate the market while DRI is a manufactured product, has no flexibility in pricing due to standard cost structure based on raw material inputs .

11. High volumes of import of scrap severely impact DRI producers . Due to the sluggish international steel market, additional scrap is finding its way into India.

12. Million Tonnes 4.20

13. SIMA’s View There should be judicious duty structure on steel melting scrap taking into consideration of huge investment, employment and contribution to the exchequer by DRI industry. We firmly believe that DRI producers and steel producers using steel scrap need to grow together as they are complementary and supplementary to each other.

14. 2. Sluggish Market • Demand of DRI has drastically come down impacting bottom lines of almost all the DRI producers because of lower steel demand due to economic slow down in India and world. • Prospects to boost steel demand • Make in India programme earmarked $ 87 billion worth of investment in new infrastructure and manufacturing project over next 5 years. • Railways plans to expend $ 125 billion on its network in next 5 years. • Housing sector

15. 3. Shortage of Natural Gas • Totalrequirement: 7.64 mmscmd • Allocation to three existing gas based plants: • APM gas 5.36 mmscmd • RIL KG D6 4.19 mmscmd • Presentavailability 1.14 mmscmd (about 15%) • Imported LNG: 2/3 times costlier, too costly to afford • Contribution of NG based DRI plants in total DRI production • is coming down very fast. In 2015-16 , it has come down to • 13.59% compared to 26.66% in 2010-11.

16. Innovative Actions taken to substitute NG • Use of Coke Oven Gas • Use of Corex Gas • Use of Coal Gas • Above measures are expected to substantially increased gas based DRI/HBI production in India.

17. About SIMA

18. Sponge Iron Manufacturers Association (SIMA) - an all India • apex industry body of Indian DRI industry. Established in 1992 • with headquarter in Delhi. • About 100 direct members and about 150 indirect members • through regional associations. • All medium and major DRI producers are its members.

19. Main Functions of SIMA • To fulfill the multi-dimensional role of providing a common • platform for exchanging knowledge, experience & growth • related aspects. • To review the industry vis-a-vis Government policies, global • developments and market feasibilities. • To interface with Government to promote & protect the ever • growing needs of the members in fast changing business • environment. • To have updated database from the national and global point • of view to keep the members informed of growth options and • future prospects for decision making.

20. To project the achievements of the members and industry with • an objective to create a corporate image for DRI industry’s • contribution both in domestic and international scenario. • To organize national and international technical seminars to • apprise the members about the latest technological develop- • ments in the area of process and equipment technologies, • exploitation of inferior grades of raw materials , energy efficiency • etc. • To bring out an in-house magazine “DRI UPDATE” with a • clear focus on technological innovations in the area of DRI • production to enable its members to explore the avenues to • reduce their cost of production.

21. SIMA’s CSR Activities • First time in its 23 years history, SIMA organized rural health • check up camps at Lahanda and Gobindpur , two tribal villages of • Odisha, in 2015. • Such CSR activity is also being planned in current FY

30. To make Hon’ble Prime Minister’s initiative of “Make in India” a grand success, it is imperative for the Indian steel industry to grow. And for sustainable growth of Indian steel industry, it is imperative for Indian DRI industry to grow.