11th INDIA COAL MARKET CONFERENCE 2017 The future of Coal preparation and alternative sources of Met Coal for Indian Steel Mills Sudip Kumar Basak Executive Director SAIL-Collieries Division September 11th 2017 Hyatt Regency, Kolkata,INDIA

The apparent steel use/capita annum in 2016 is very low at 63 kg only in comparison of 282.7kg in USA,265.7kg in Russia, 207.9kg in the world and 163.6 kg in Asia. The first three net exporters of steel are China, Russia with the support of 94.5,34.5 and 26.9 million tones respectively whereas the net importers are USA, Vietnam and Thailand with 21.7.17.0 and 16.1 million tones respectively

Steel’s growth to raise coking coal demand Note: Forecasts for coking coal based on requirement of 780 kg of CC per 1,000 kg of steel in blast furnace route

Coking coal demand

Domestic Clean Coking Coal Scenario

EBIDTA Margin of Indian Steel Companies- Under Pressure

TOPICS, IRON MAKERS SHOULD CONSIDER. FUTURE CHALLENGES RESOURCE DEPLETION RISING ENERGY DEMAND ENVIRONMENTAL CARE TOPICS, IRON MAKERS SHOULD CONSIDER.

FUTURE RISKS RESOURCE DEPLETION RISING ENERGY DEMAND ENVIRONMENTAL CARE INCREASING RAW MATERIAL COST INCREASING ENERGY COST ENFORCED ENVIRONMENTAL LAWS

EMERGING SCENARIO IN IRONMAKING More than 90% of world iron production is through Blast furnace technology route. Driving forces: Alternative Iron making technologies: Costly and scarce coking coal: Need to look beyond coking coal. Possibility to use iron ore fines directly. Environmental considerations. Eliminate pollution-intensive sintering and coke- making processes. High capital cost

Possible Solutions Direct Reduced Iron (DRI) Reduction of ferrous oxide in solid state. SL/RN, MIDREX, ITmk3 etc. Smelting Reduction of Iron COREX, FINEX, Hismelt etc. using non-coking coal. Obviating the need for coke oven batteries and sinter plants.

INDIAN Raw Material Flexibility ƒ Iron ore – Dry fines (-6mm) and slimes (ultra-fines) – used directly High phosphorus content possible No blending or agglomeration necessary Can be pre-heated / pre-reduced to increase process efficiency ƒ Steel plant wastes – Dry fine wastes and metallic fines – used directly E.g. mill-scale, steel-making slag, reverts, coke breeze ƒ Coal – Non-coking coals – ground to -3 mm and dried From coke breeze (low volatile) high volatile thermal coal (40%) No blending, briquetting or coking required

CONVENTIONAL BLAST FURNACE PROCESS

Available Smelting Reduction (SR) Processes SR technologies currently commercially exploited or ready for commercial exploitation. COREX (Two stage): Operating commercially FINEX (Two stage): Operating commercially HISMELT (Single stage):Not being Operating commercially at present. • Single stage: Reduction & melting in the same vessel • Two stage : Reduction in one vessel; melting in the 2nd vessel.

COREX: Process Features Developed by Siemens VAI. Commercially most successful among SR technologies. Work is carried out in 2 reactors. Reduction shaft Melter-gasifier. Commercial units in operation Korea : POSCO (COREX C-2000 – Capacity: 0.8 Mtpa) India : JSW Steel (2 Units) (COREX C-2000) : Essar Steel ltd (2 units) (COREX C-2000) South Africa: Mittal-SALDANHA, (COREX C-2000) China : Baosteel, (COREX C-3000) – Capacity 1.5 mtpa

Blast Furnace vs COREX

FINEX PROCESS Siemens VAI and POSCO jointly developed the process. FINEX R&D since 1992. FINEX demo of 600 Kt/y since June 2003. FINEX of 1.5 Mt/y in May 2007 (1st commercial plant). Based on the direct use of non-coking coal and fine ore. Most exciting iron making technology on the market today.

Blast Furnace vs FINEX

FINEX - Advantages production pollutants Blast Furnace FINEX

Higher Quality Iron: Compared to blast furnaces Typical Analysis Carbon 4.5% 4.4 ± 0.15% Silicon 0.5 ± 0.3% <0.01% Manganese 0.4 ± 0.2% <0.02% Phosphorus 0.09 ± 0.02% * 0.02 ± 0.01% ** Sulphur 0.04 ± 0.02% 0.1 ± 0.05% # Temperature 1430 - 1500°C 1420°C # Dependant on sulphur input (mainly from the coal). With hot metal de-sulphurisation treatment (known technology) sulphur levels are easily able to be reduced to <0.05%. Low Phosphorus Ore High Phosphorus Ore * **

Lower Operating Cost ~10-20% lower operating costs Relative Index 1.4 ~10-20% lower operating costs 1.2 1.0 0.8 Relative Index 0.6 0.4 0.2 0.0 Blast Furnace HIsmelt Ore Coal Other

Hismelt’s Advantages for India ƒ Flexibility in Raw Materials ƒ Lower Capital & Operating Costs ƒ Lower Environmental Impact ƒ High Quality Iron Product

Final conclusion Developing markets mainly led by china and India pulling the global steel demand. Restricting growth factors are: Scarcity of high grade raw materials. Global environment problems and concerns. Development of innovative alternative iron-making process technologies. Low grade, low cost resources and to reduce the level of air pollution.

Coking and Non-Coking Coal Reserves , Billion Tonnes Resources of India Types of Coal Reserves , Billion Tonnes Prime Coking 5.3 Medium Coking 25.3 Semi-coking 1.7 Sub-total Coking 32.3 Non-coking 268.7 Total (Coking and Non-Coking) 301.0

Problems with Indian Coals Non-Coking Coal Coking Coal High Ash – 40-50 % Drift Origin Poor Washability More Near Gravity Materials Environmental Concerns Poor yield of clean coal Loss of fine coal in slurry Poor pe4rformance of Washeries Generation of more middling Dewatering of fine coal

Opportunities Non-Coking Coal Coking Coal Improving the yield of clean Simple Washing techniques to yield coal < 34.0% Blending of Indian Coal with imported coal Dry beneficiation techniques High quality clean coal for direct reduction Three product Washeries: BF injection Sponge Iron Power generaion Improving the yield of clean coal by - Additional clean coal from middlings by crushing to finer sizes. Improving the performance of fine coal circuit Improving the dewatering techniques

What are the Clean Coal Solutions Beneficiation Physical Chemical Biological Others (Nanotech., Sound, Electromagnetic etc

Coal Preparation Past: Simple Mining of Non-Coking Coal Beneficiation of Coking Coal Present: Beneficiation of Non- Coking Coal at coarse size Beneficiation of coking coal including fines Future: Deep Beneficiation of Non- Coking Coal to achive 10% ash coal for metallurgical purpose by physical, chemical & biological process. Deep beneficiation to recover more carbon values from middlings and fines

Key Drivers for Coal Washing Business

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