Shutdown of Manganese, Chromite Mines to Hurt Steel, Ferro Alloys Production

The ending of lease tenure of seven operative manganese mines and four chromite mines by March 31, 2019 will create raw material disruptions for steel manufacturers and ferro alloys industries.

"Seven working manganese mines and four working chromite mines are going to shut operation in few months, by 31st March 2019, leading to wiping out almost 16 per cent manganese ore production and 50 per cent chromite production from the domestic market, thus disrupting raw material supply for ferro-alloys and steel industry and also creating massive unemployment for a long period. Such a demand-supply imbalance is bound to adversely affect all existing ore producers as well as ferro-alloy units", said Sunil Duggal, president of Federation of Indian Mineral Industries (Fimi).

With an enormous focus on infrastructure and domestic manufacturing, India has set an ambitious target of 300 million tonnes of crude steel production by 2030-31 which means increasing the present capacity by 2.11 times from 142 million tonnes to 300 million tonnes in the next 11 years. This would translate into requirement of 11 million tonnes of manganese ore and five million tonnes of chrome ore as per the National Steel Policy (NSP) 2017. This can only be achieved when the manganese, chrome ore and ferro-alloys industry gear up and enhances its output much before 2030. With abundant resources and Government's plans, there is huge potential in the Indian manganese/chrome ore and ferro-alloys sector.

Ferro alloys industry in India is being squeezed by weak demand, high power costs, cut-throat competition in international market and stagnation in the steel demand and production in the country. Despite having a total production capacity of 5.15 mtpa (million tonnes per annum) in the ferro-alloy industry, the industry has been battling a slowdown in the past 5 years (2013-18), with production of ferro-chrome stagnant at 1 million tonnes, ferro-manganese at 0.52 million tonnes and ferro-silicon at 0.09 million tonnes. To facilitate growth in the sector, the Government in its National Steel Policy 2017 has planned to support ferro-alloy plants by ensuring raw material linkages and stable supply of electricity.

Duggal said, "There is also a huge competition from the global markets and the industry must utilize its full potential and rise to new levels of technological competitiveness and productivity. The domestic ferro-alloys industry needs to be promoted through a mix of progressive market development strategies and suitable fiscal measures to offset cheaper imports."

India is endowed with huge resources of manganese ore to the tune of 496 million tonnes and chrome ore to the tune of 344 million tonnes as on April, 2015. Currently India is importing these minerals. Despite significant addition of resources of manganese and chrome ore over the last decade, ore production in both cases has been hovering, with manganese ore around 2.4 million tonnes to 2.7 million tonnes and chrome ore around 2.2 million tonnes to 3.5 million tonnes during the last 4 years. The gap in domestic production and consumption is being increasingly met through imports and huge stockpiles of presumably low-grade have built up at the mine-heads. Thus, there is a pressing need for entrepreneurs to beneficiate these low-grade ores for utilization by domestic ferro-alloys industry.