Bhilai’s existential crisis

There is threat to its iron ore security in Maoist-affected Bastar district of Chhattisgarh

Bhilai Steel Plant (BSP) is unquestionably a jewel in the crown of Steel Authority of India Limited (SAIL) that has four other integrated steel plants (ISPS). The recognition is based on techno-economic parameters of steelmaking as also its uniquely rich product portfolio. This is further validated by BSP being chosen on most occasions as the best ISP for prime minister’s trophy since its introduction in 1992-93.

But now for factors not within its control, BSP may face an existential crisis. Despite having secured leasehold and mining right and environment clearances for an enormously large and highly-rich iron (Fe) content deposit at Rowghat in Bastar district of Chhattisgarh, there is a looming threat to its iron ore security. BSP is realising cost ownership does not necessarily guarantee excavation of the mineral.

A highly-disturbed environment with Maoists striking terror in Rowghat at their will, BSP is seeking resolution to the challenge of laying a railway line for excavation of iron ore from the mine, sought to be opened with security cover provided by Border Security Force and Sashastra Seema Bal. While attempts are made in the traditional way of using armed forces to stop the Maoist in the area, which has exceptionally-rich endowments of iron ore, Anirban Dasgupta, chief executive officer of BSP (since promoted as SAIL director in charge of projects and business planning) thinks the challenge is also of weaning away the local people, tribal people mostly, from the extremist influence by offering education and healthcare. For this, BSP has found an effective ally in Ramakrishna Mission Ashram at Narainpur in Chhattisgarh.

With every passing day, the urgency of sourcing iron ore from Rowghat F block with estimated reserves of 511 million tonnes (mt) having Fe content of around 65 per cent is felt acutely by the BSP management. This is because the quality of ore coming from a group of mines from the 1960s vintage group of mines at Dalli-rajhara, some 85 km south-west of Bhilai is down to an extent that its use in blast furnace results in slag generation of up to 430 kg per tonne of hot metal produced compared with slag rate of less than 300 kg when ideal grades of ore is fed.

Dalli-rajhara mines have been subject to excavation over so many decades that a precipitous fall in the share of lump in what is taken out of the earth is inevitable. As the lump-fines ratio has changed for the worse and the Fe content in the ore is down, the blast furnace requires additional heat. This finally boils down to use of more energy in terms of coke use, says a disconsolate Dasgupta. BSP also has to contend with growing gangue content — that is silica (SIO2) and alumina (AL2O3) — in ore standing in the way of preparation of ideal blend for blast furnace feed.

Unlike the other four ISPS — all in the eastern part of the country — which are supplied with iron ore by the company’s raw material division (RMD), BSP is unique as it alone has its own “iron ore complex.” That advantage is fast wearing out as the deterioration in Dalli-rajhara ore quality will bear out. To supplement what is available from its own mines, BSP is getting 7,00,000 tonnes to 8,00,000 tonnes of fines a year from its RMD though here the logistics cost of transportation from mines in the east is high. Whatever the security challenges and other hurdles, including securing state government approval for felling of trees in areas to be opened for mining, BSP must move as fast as possible to make Rowghat operational to insure the future of the largest and most profitable mill in the SAIL family.

BSP has rail linkage with Dalli-rajhara and work is on to build a 96 km rail connectivity between Dalli-rajhara and Rowghat. Scared by the surprise Maoist attack factor, work on rail building has so far proceeded by fits and starts. The more recent improvement in mobilisation of security forces has given Dasgupta the confidence to complete building 60 km rail line by March end. Incidentally, the Railways has left it to the BSP to finance the construction of the railway track, which will be built over a period of time by way of concessional iron ore freight.

Dasgupta says: “We are working on a few projects ahead of Rowghat opening for improvement in ore supply from our own resources. The most significant of these is what we call ‘interim mining’ to be undertaken in a portion of our Rowghat leasehold area from where we will bring ore to the nearest railway loading point by road.” Ore reserves at the area carved out for ‘interim mining’ are 81 mt and the plan is to produce 3,00,000 tonnes a year. Ore, however, will come earlier from Kalwarnagur where exploration over 17 hectares out of an owned area of 938 hectares has confirmed reserves of 7.22 mt.

A BSP mines official says excavation should start in about eight months and yearly production, to start with, will be 3,00,000 tonnes and will be stepped up to 7,00,000 tonnes in phases.

For any miner, a big challenge relating to conversion of waste into wealth and environment protection is to separate iron ore from slime accumulated over the years in the tailing pond before there is any danger of breach of surrounding wall. At Dalli tailing pond, an estimated 19 mt iron ore has accumulated, which is now sought to be recovered through beneficiating. The ore found in slime has Fe content of 54 per cent. But high quality beneficiation will lift the level of Fe in processed ore to 64 to 65 per cent. Fines to be available in micro sizes will be sintered before their use in the blast furnace. Attempts will be made to annually recover and process 1.2 mt of ore from Dalli tailing pond.

BSP has become a 7 mt crude steel capacity plant after claiming ~18,000 crore of the total SAIL investment of over ~70,000 crore in modernisation and expansion of all its mills.

Surprisingly, even while it has to make do with enormous quantities of iron ore fines, it still does not have the benefit of a pellet plant. Pellets are used in blast furnace burden as a substitute for sinter and calibrated lump ore. Interestingly, a pellet unit for BSP was thought of during its modernisation planning. The management is now exploring the possibility of getting pellets made in units outside the state with capacity to spare on conversion cost basis. Furthermore, a micro pellet plant is also under the consideration of the management.

Dasgupta says BSP will take a further leap at capacity expansion to 10.5 mt by installing one more big blast furnace along with corresponding new facilities in upstream and mills in downstream. This will be conterminous with SAIL becoming a 50 mt group in its next expansion drive.

But ahead of further expansion, BSP must fix the Rowghat problem.