For Official Use DSTI/SU/SC(2006)43 Organisation de Coopération et de Développement Economiques Organisation for Economic Co-operation and Development 30-May-2006 ___________________________________________________________________________________________ English text only DIRECTORATE FOR SCIENCE, TECHNOLOGY AND INDUSTRY STEEL COMMITTEE For Official Use DSTI/SU/SC(2006)43 d INDIA RAW MATERIALS OUTLOOK FOR INDIA e i f Joint India/OECD/IISI Workshop, New Delhi (India), 16-17i May 2006. s Presentation by Mr. A.D. Baijal, Vice President, Raw Materials, Tata Steel s a l c n Contact: Wolfgang Hübner, Head of Structural Policy Division and Steel Unit Tel: +33 1 45 24 91 32 Fax: +33 1 44 30 62 63 E-mail: [email protected] UUnclassified text only English JT03209761 Document complet disponible sur OLIS dans son format d'origine Complete document available on OLIS in its original format DSTI/SU/SC(2006)43 Raw materials outlook for India - A Review A D Baijal VP (Raw Materials) Tata Steel IISI-OECD CONFERENCE Date: 17th May, 2006 1 Presentation Outline Steel Industry -Global - Indian Raw materials for Steel Policy / Legislation Infrastructure Conclusion 2 2 DSTI/SU/SC(2006)43 Global steel demand poised for robust growth Crude Steel Production (Million Tonnes) 1,200 1,000 The Early The 1st The 1st The 2nd The 2nd 800 Years Plateau Surge Plateau Surge 600 CAGR CAGR 5 % CAGR 1 % 400 CAGR 7 % CAGR 2 % 5 % Fall of USSR 200 Great WW 2 Oil Crisis Depression Asian WW 1 Financial 0 Crisis 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 3 The Global Economic Forecast: Asia poised to be the emerging power house of growth • In 2020, the US and China will still be the two largest economies in the world (in PPP) • India leaves Japan behind and moves up to 3rd place • India, Malaysia and China will post the highest GDP growth rates (above 5%) over 2006-20 4 • Ireland, the US and Spain are the rich countries expected to grow the most 3 DSTI/SU/SC(2006)43 Indian Economy GDP per capita to increase from USD 2500 and USD 5000 in 2020. Poverty ratio dropped from 50% of population in 1950 to 26% in 2005. Economic growth rate ~ 8% Population growth rate of 1.3 - 1.5% 33% population below 15 years and 5% above 65 years House hold savings rate go up from current 23% to 30% 100,000 MW new capacity (90% of present) in next 7 years. The Fiscal Responsibility and Budget Management Act Literacy standards increase from 18% in 1951 to 65% in 2002. 5 Steel Consumption Vs. GDP 10000 Steel Consumption and GDP per Capita in 2004 1000 ption (kg/capita) S.Korea China Taiwan Japan 100 Steel consum US India Other Africa 10 0 5000 10000 15000 20000 25000 30000 35000 40000 GDP per capita (US$000 at PPP rates) Bubble size represents the population The growth in BRIC will double the steel demand by 2050 6 Source: internal analysis 4 Growth in key sectors will drive the steel demand 1400 1200 1000ita p U AE 800 er Ca Apparent Steel consumption p s600 of countries g T aiwa n K 400 Sou th Ko rea 200 0 Ho ng K o ng DSTI/SU/SC(2006)43 We feel the growth trigger has Jbeenapan fired…..….. UAE – 1252 G erm any Au str alia Countries U SA (Last 3 years GDP growth of + 7.5%) Production sites will move to regions with both RM F ran ce source and demand. C hina > 150 MT, The In di a present gap World Avg. – 170 Excess India – 33 Raw Material basin CIS Deficit Avail-ability of Iron Ore USA / Canada 7 EU Latin America Japan 5 Eastern Low Mature basin Europe India Forecasted Growth rate 2005-15 Growth basin China Other emerging Asian countries High 8 DSTI/SU/SC(2006)43 Indian Steel production likely to triple in next 15 years National Steel Policy Steel Production Projections 150 Planning 125 Commission projections 110 100 75 70 50 Crude Steel : mtpa Steel : Crude 50 34 36 29 31 25 0 2000-01 2001-02 2002-03 2003-04 2006-07 2011-12 2020 Year To realize the above projections, it would be necessary to put in place the right policies as well as alignment of the policies Presentation Outline Steel Industry -Global - Indian Raw materials for Steel Policy / Legislation Infrastructure Conclusion 10 6 DSTI/SU/SC(2006)43 Multifold increase in Raw Material Consumption 200 190 180 160 140 120 2004-05 100 2019-20 (F) 80 70 60 54 39 40 27 26 20 13 13 0 Iron Ore Coking coal Non coking coal Fluxes 11 Indian Iron Ore Reserves: States Ore Fe Alumina Phos Five Zones Range (%age) Max States Major Mines / Deposits (%age) (%ag e) A-Orissa, Haem 62-64 2-4 0.04- A-Orissa, Chiria, Noamundi, Joda, Jharkhan atite 0.1 Jharkhand Kiriburu, Meghataburu, d Thakurani, Bolani, Gua, Malangtoli, Gandhamardan, B- Haem 64-66 1.0-4.0 0.04- Daitari Chattisga atite 0.15 rh, MP, B-Chattisgarh, Bailadila, Dalli,Rajhara, Maharash MP, Rowghat, Mahamaya, tra Maharashtra Aridongri, Surajgarh C- Haem 62-64 2.0-4.0 0.04- Karnataka atite 0.09 * C-Karnataka Donimalai, Ramandurg, D-Goa Haem 60-63 2.0-4.0 0.04- * Kumaraswamy, NEB Range, atite 0.07 Ettinahatti, Tumti, Belagal D-Goa N Goa, S Goa, Redi E- Magn 35-45 1.0 - Karnataka e E-Karnataka Kudremukh, Bababudan, * * Kudachadri * 12 7 DSTI/SU/SC(2006)43 Iron Ore Production Trend Indian Resources: 23 bt 350 10% AP 300 rs the 6% 250 O 200 150 Karnatak 14% Jharkhand a 100 39% m illio n to n n es h oa r 50 G a g is 3% tt 0 a h '99-00 '00-01 '01-02 '02-03 '03-04 '04-05 2020 C Orissa 10% Production Consumption Exports 18% 13 Natural iron ore resources can support lump: fines ratio of 20:40 as against current adverse trend of 40:60 90.00 The current steel production through BF/BOF:DRI:others is77.9 60:33:7 80.00 Lumps 70.00 Fines 67.1 Concentrates 60.00 55.1 53.0 s 47.4 50.00 45.2 41.2 39.6 40.00 Million Ton Million 33.6 34.6 30.00 20.00 10.00 6.0 6.4 6.5 6.1 7.1 0.00 2000-01 2001-02 2002-03 2003-04 2004-05 - Fines are mostly being exported - DRI route uses 100% lumps, detrimental to mineral conservation - Economies of scale not available with large number of small players to set up sintering / pelletization facilities - Increasing use of fines in agglomerates in bigger size blast furnaces can 14 increase its productivity and bring down cost/tss 8 DSTI/SU/SC(2006)43 Domestic DRI production : Trend and Forecast 40 30 Growing @~7% 20 million tonnes 10 0 88 91 94 97 '00 '03 '04 '05 '06 '20 Capacity Production Increasing DRI production may lead to faster depletion of high quality lumpy ore reserves 15 Source: Tata Steel analysis With expected CAGR of ~7% and exports at 50 mtpa, India will become an importer of iron ore in next 40 years. Exports of iron ore =50 Mtpa NATIONAL STEEL GROWTH CAGR=3 CAGR=4 CAGR=5 CAGR=6 CAGR=7 1000 15000.00 900 Reserves in 10000.00 800 MT 700 5000.00 600 500 0.00 Iron Ore 400 Production -5000.00 300 in MT Mineable Reserves (Mt) Iron Ore Production MTPA Production Iron Ore 200 -10000.00 100 0 -15000.00 2004-05 2006-07 2008-09 2010-11 2012-13 2014-15 2016-17 2018-19 2020-21 2022-23 2024-25 2026-27 2028-29 2030-31 2032-33 2034-35 2036-37 2038-39 2040-41 2042-43 2044-45 2046-47 2048-49 2050-51 Most of the iron ore reserves are in reserve forest and environment 16 sensitive areas making the actual availability of reserves much less 9 DSTI/SU/SC(2006)43 Imperative – Need for conservation and resource enhancement Conservation ….for future Challenges o Scientific Mining - Selective mining of high grade o Agglomeration capacity lumpy ores (DRI). o Use of pellets for DRI o Beneficiation. - Many low volume producers o Technology for using - Mismatch in agglomeration Slimes capacity and fines generation. o Restricting exports. - Lower production (33%) routed Enhancement … through beneficiation. o Detailed / Scientific - Increasing exports. Exploration 17 Indian Coal Reserves Billion tonnes Proven: 35 Indicated: 30 Total : 65 Proven: 7 Proven: 11 Indicated: 8 Indicated: 12 Total : 15 Total : 23 Proven: 14 Proven: 5 Indicated: 30 Indicated: 2 Total : 44 Total : 7 Proven: 9 Indicated: 25 Total : 34 Proven 90 Indicated 110 Proven: 8 Indicated: 6 Inferred 46 Total : 14 Total 246 18 10 DSTI/SU/SC(2006)43 Domestic Coking Coal Coal Reserves, BT Coking Coal Producers Washed Coal Ash Semi-Coking 28 CIL 5.8 BCCL 18% Prime Coking 6 Tata Steel 3.3 CCL 18% Non Coking 212 Others 0.5 Tata Steel 13% Total 246 3% Coking 86% 14% 11% Non-Coking Prime Coking Med Coking The Indian Coal, both coking and non coking is characterized by high ash and low washability index. 19 Geological Survey of India : As of 1.1.2001 Imports of Coking Coal to increase due to low Indigenous availability 25 21.0 100 88 20.0 20.0 Coking Coal 20 18.4 16.8 80 15.1 62 15 60 MTPA 8.1 MTPA 10 8.3 8.2 8.2 8.1 8.1 40 28 13 5 20 8 10 0 0 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2005 2015 2025 Indigenous Coal Imported Coal Demand Domestic Supply - The additional demand for coking coal will be 70 mt by 2020 for 110 mt steel demand as per national steel policy - For coking coal, dependence on imports to continue Source: 10th Plan report 11 DSTI/SU/SC(2006)43 Need to conserve the scarce coking coal resources Challenges Conservation of resources for future use -High ash o Beneficiating - Poor washability o Improving washing capacity / efficiency - Over 40% coking coal used o Technology using for thermal use.