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

Snapshot of Indian DRI Industry by Executive Director , SIMA Deependra Kashiva Executive Director , SIMA

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 .

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.

Industry Profile 1. Number of Plants Gas Based 5 Nos Coal Based 369 Nos Total Plants 374 Nos 2. Capacity Gas Based 12.60 million tonnes/year Coal Based 36.03 million tonnes/year Total 48.63 million tonnes/year

Indian DRI/HBI Production Year Gas Based(MT) Coal Based (MT) Total (MT) 2006-07 5.26 11.01 16.27 2007-08 5.85 14.14 19.99 2008-09 5.28 16.05 21.33 2009-10 6.17 16.82 22.99 2010-11 6.19 17.06 23.25 2011-12 5.15 15.41 20.56 2012-13 3.93 14.74 18.67 2013-14 2.61 15.49 18.10 2014-15 3.14 14.32 17.46 2015-16 3.92 13.95 17.87

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

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

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

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 .

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. Year Import (million tonnes) 2010-11 4.20 2011-12 4.90 2012-13 8.14 2013-14 4.57 2014-15 5.40 2015-16 6.70

Million Tonnes 4.20

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.

2. Sluggish Market Prospects to boost steel demand 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

3. Shortage of Natural Gas Total requirement: 7.64 mmscmd Allocation to three existing gas based plants: APM gas 5.36 mmscmd RIL KG D6 4.19 mmscmd Present availability 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.

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.

About SIMA

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.

To fulfill the multi-dimensional role of providing a common 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.

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.

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

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.