Steel ministry for phasing out exports of chrome ore

Steel ministry for phasing out exports of chrome ore
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First Published: Mon, May 21 2007. 02 24 AM IST

Preventive measure: The ministry has also recommended chrome feed grade during making concentrates be reduced to 38% to curb misuse of exporting chrome ore as chrome concentrate.
Preventive measure: The ministry has also recommended chrome feed grade during making concentrates be reduced to 38% to curb misuse of exporting chrome ore as chrome concentrate.
Updated: Mon, May 21 2007. 02 24 AM IST
The steel ministry has asked the commerce ministry to reduce an export cap on chrome ore and has recommended a complete ban on the mineral’s export from 2009, as concerns of a large-scale shortfall of the mineral’s supply hit the domestic stainless steel and ferrochrome industries.
The sudden fallout is primarily due to a decision of Tata Steel Ltd, the country’s largest producer and exporter of chrome ore, to stop supply of the mineral to domestic users and, instead, utilize the material for its own expanding ferrochrome and chrome concentrate production.
Chrome concentrates are made from low-grade ore, primarily through the beneficiation process—which is the crushing and separation of ore into valuable substances and waste—to strengthen the chromium content.
Preventive measure: The ministry has also recommended chrome feed grade during making concentrates be reduced to 38% to curb misuse of exporting chrome ore as chrome concentrate.
Chrome ore is used in making ferrochrome, which, in turn, is used in making stainless steel, which is in great demand from a construction boom, the growing elevators and kitchenware businesses, and an expanding automobile industry, which uses the non-corrosive material for external body surfaces.
Amid dwindling reserves, the letter from the steel ministry, which has the support of steel minister Ram Vilas Paswan, recommends that the current export ceiling of four lakh tonnes should be brought down to three lakh tonnes this year, and further trimmed to 1.5 lakh tonnes next year before introducing a total ban.
Since Tata Steel’s policy came into effect from 1 April, industry representatives, such as the Indian Ferro Alloys Producers’ Association, have been urging the government to open up alternative resources including the vast but mostly unexplored mines belonging to the Orissa Mining Corp., which is under state control. That company’s reserves extend over 6,000 hectares of land.
Orissa Mining, apart from Tata Steel, has monopoly control over the mineral found in Orissa’s Sukinda valley, where the country’s largest chrome ore deposits are found. The mineral was first discovered by the Tata group in 1949.
While Orissa Mining has the largest tract of mining area, Tata Steel has been the biggest producer and exporter of both chrome ore and concentrates. The company, which produces over five million tonnes of steel but does not produce any stainless steel, has now taken a decision to conserve the mineral to produce its own ferrochrome and chrome concentrate manufacturing.
According to one estimate, India had roughly 50 million tonnes of charge chrome grade ore, a higher quality material that can directly be used in furnaces, but the country’s reserve is said to have depleted by more than half to 38 million tonnes.
The mineral reserve accounts for less than 2% of the world reserve, and by another estimate only about 0.84%, but India exports about 40% of mined chrome ore.
At a seminar on chrome and manganese, organised by the Federation of Indian Mineral Industries in Udaipur last month, the chrome ore requirement for the domestic stainless steel industry was pegged at 38 million tonnes for the next decade.
Total export of chrome ore and concentrates, mainly channelled through the Mines and Mineral Development Corp., stood at 15 lakh tonnes, of which chrome ore exports made up roughly 3.5 lakh tonnes.
The steel ministry has also recommended that the chrome feed grade during making concentrates be reduced from the current 42% to 38% to curb misuse of exporting chrome ore as chrome concentrate.
This step, said Subhrakant Panda, joint managing director of Indian Metal & Ferro Alloys Ltd, is a welcome step. “The feedgrade should be further brought down to 33% like it used to be a few years ago,” he said. Indian Metals is the country’s largest producer of ferrochrome at 1.3 lakh tonnes, and one of the four Indian companies to own captive chrome ore mines.
India produced about 7 lakh tonnes of ferrochrome last year, of which nearly half was exported.
Domestic prices of ferrochrome is between Rs42,000 and Rs44,000 per tonne. Its international price is roughly 80 US cents per pound of chromium content, but has risen by 10-12% in the last quarter backed by strong demand from China.
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First Published: Mon, May 21 2007. 02 24 AM IST
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