While India leads the world in Direct-Reduced Iron production, the domestic industry has been facing an uphill production battle for the last four years.

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India’s DRI sector is hoping for help from the government and clarity in the overall steel policy to see it through, what many have dubbed, its most critical phase ever.

Demand DRIs Up

What is worrisome is that the falling demand for steel, especially construction steel globally, could further, negatively impact the sector. Some are quick to note that India’s DRI units need not worry much on this front as the market in India has remained insulated from global trends owing to steadily increasing domestic steel consumption.

Two other risks facing the sector are imported scrap being used by steel companies in India, DRI is an excellent substitute for scrap in electric arc furnaces, and the reliance by medium-sized DRI producers on inferior technology. That means technological limitations stop the producers from exploiting inferior grades of iron ore and coal.

Further, the limited availability of coking coal only motivates steel production in the country through a combination of DRI and blast furnace. What has added to the misery is the recent round of coal auctions held by the federal government.

Unable to Bid in Coal Auction

DRI companies were unable to participate in the auction, and a hitherto discounted source of fuel was lost, pushing the cost of DRI production by an estimated 40%, some have said. The DRI segment has brought this to the government’s attention.

While many steel companies prefer to use DRI instead of scrap, the slowdown in the global steel industry has seen some amount of the steel melting scrap being imported into India because of lower import duties. What makes steel plants happy in such cases, besides the cheap duty, is the fact that the imported scrap percentage works out to be higher, which eventually negates the cost of imported scrap.

To many analysts, the DRI sector in India is poised on the cusp of a turnaround, but only if there is adequate government backing as well as support from domestic steel companies. Even then, it could easily take four years for the industry to come back to an even keel and ramp up production.


According to the latest Short Range Outlook (SRO) report released by the World Steel Association for 2015-2016, steel demand was forecast to grow by just about 0.5% to 1.544 million metric tons in 2015. The next year could be better with a forecast of 1.4% to reach 1,565 mmt. Last year, incidentally, steel use grew by 0.6% in 2014.

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The economic slowdown in China is leading to lesser uptake of steel and that was was one of the major reasons for the sluggish growth. This was expected to be partly only partially offset by a measure of growth in developing economies such as India, Indonesia and Vietnam.

The Dragon Gives Way to the Tiger

Clearly, in the next two years, so far as steel is concerned, one emerging superpower will give way to another neighboring one. India’s steel consumption growth was on its way to register a new high this year as well as the next, at 6.2% and 7.3%, respectively, while other high-consuming nations besides China, including the US and Japan, are expected to see a decline.

India, as per WSA data, was the world’s third-largest steel producer with a production of 14.6 mmt in the first quarter of 2015. In this period, India’s production grew by 9.4% compared with the first three months last year. As reported by MetalMiner, it was in February this year that India had passed the US to become the world’s third-largest steel producer, after China and Japan.

Can India Offset the Losses?

The world’s steel sector hopes India can power it through this downturn. The country’s per capita consumption is still low, at about 60 kg opposed to the world average of 220 kg. With the government’s Make In India (manufacturing) plan slowly grinding into motion, it is now hoped that this would lead to an increase in steel consumption.

So, is the China steel story over? It’s affirmative, at least for the short-term. The economic deceleration there, following low investment growth since 2008, was expected to adversely impact its steel growth, and it has.


It is one of those delicious ironies of life that India, the world’s largest consumer of gold, has very little to show when it comes to actually mining the yellow metal.

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That’s poor form because India sits on very large resources of gold, revealed by several geological studies in the past. One such study pegged India’s primary gold resources at about 491 metric tons. Despite its 6,000-year mining history, the country mines just around a pitiful 25 mt of gold annually.

Imports Flourishing

India is one of the biggest importers of gold, despite a punitive 10% import tax. In the financial year ended March 31, gold imports had touched 900 mt, up 36% from a year ago.

Perhaps keeping all this in mind, and the fact that gold mining could mean earning some big bucks, Western Australia recently expressed interest in developing gold mines in India, as part of the bilateral cooperation in minerals and energy sectors between the two nations.


India’s dependence on thermal coke from abroad is beginning to raise concern in international circles, though some exporting countries are happy to have the business.

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India sits on mountains of thermal coke, yet mainly due to bureaucracy, it has to depend on imports.

The day, it seems, is not far off when India will topple China as the World’s number one importer, if analysts were to be believed.

Coal, Coal, Everywhere But Nary a Chunk to Mine

The situation is, indeed, grim. It has made Indian Power Minister Piyush Goyal remark at a public platform that it (importing thermal coke) is shameful. The minister told an audience after inaugurating a power project recently near Nagpur in central India that the government plans to almost double the government coal production by 2019-20. He added that importing coking coal, used for making steel, may be a necessity but thermal coal is at a surplus in the country, yet India is still being forced to import it. A Ministry of Coal report estimated coal reserves at about 300 billion metric tons, of which 125 billion mt were in the “proved” category.


Speaking at the agreement signing ceremony featuring India’s seven steel majors in the creation of the new Steel Research and Technology Mission (SRTMI), Indian Steel Minister Narendra Singh Tomar said the joint initiative of steel industry and the government would also help the steel industry to play a major role in creating employment.

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This new industry-led initiative to promote collaborative research programs in India’s steel sector aims to increase investment in research and development in the steel sector from its present level of 0.2-0.3% of turnover progressively towards the international benchmark of 1-2% of turnover.

Public-Private Partnership

The initial approximately $32 million (about Rs 200 crore) investment for SRTMI will come in equal contribution from the Steel Development Fund of the ministry and the participating companies: Steel Authority of India Ltd. (SAIL), Tata Steel, JSW Steel, Jindal Steel and Power Ltd., Rashtriya Ispat Nigam Ltd., the National Mine Development Corporation and MECON Ltd.

SRTMI, as conceptualized by a high-level government task force, will carry out research and development in priority areas of Indian national importance covering best usage of available raw materials and conservation of natural resources, optimum energy conservation coupled with minimum emissions, innovation and in-house development of design, engineering and manufacturing facilities of key steel plant equipment.


While India’s recent growth has helped propel sales and exports of steel, the federal government here wants to maximize returns by creating a favorable atmosphere for research and development.

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As many as seven steel majors joined hands with the Ministry of Steel on Wednesday to set up a Steel Research and Technology Mission (SRTMI) in the Indian capital of New Delhi. The Steel Authority of India Ltd. (SAIL), Tata Steel, JSW Steel, Jindal Steel and Power Ltd., Rashtriya Ispat Nigam Ltd., the National Mine Development Corporation and MECON Ltd. are the first to join the project that many analysts say marks the start of a new chapter in steel research and development in India.

New Legislation

The government is considering introducing a bill in Parliament in the next session for the creation of an educational institute under the Ministry of Steel, on the pattern of India’s famous Indian Institutes of Technology, where students are able to formally learn and undertake research programs on steel.

The institute may offer graduate, post-graduate, doctoral and research programs. This is line with the recommendations of a ministerial committee instituted in 2014 that recommended such an institute to ensure a stream of knowledge workers for the domestic steel industry.

The planned outcome of these efforts goes beyond the quality of finished steel, too. The initiative is being taken, also, to find innovative uses for steel and create entire new fields of employment for India’s youth.

Investment in Research

Speaking at the signing ceremony involving the seven steel majors in SRTMI, Steel Minister Narendra Singh Tomar said the joint initiative of the steel industry and the government would also help it play a major role in new employment.

This industry-led initiative will promote collaborative research programs in the steel sector and aims to increase investment in research and development in the steel sector from the present level of 0.2-0.3% of turnover, progressively toward the international benchmark of 1-2% turnover.

The initial approximately $32 million (about Rs 200 crore) for the creation of the SRTMI will come in equal contribution from the Steel Development Fund of the Ministry and the participating companies.

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A three-nation trip by Indian Prime Minister Narendra Modi – to France, Germany and Canada – begins April 14, but metal analysts here are focusing on the Canadian leg. They expect India and Canada to sign a commercial deal for the supply of Canadian uranium for India’s nuclear power plants during Modi’s three-day visit.

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In 2010, Canada and India signed a civil nuclear cooperation agreement, followed by another agreement in 2012. Since then, Canada’s main uranium supplier Cameco has been in talks with Indian officials about supplying uranium to India. Diplomatic circles of both nations expect the deal to be sealed when Modi visits Canada next week.

Canadian Uranium

Modi dropped several hints about the deal in his Facebook posts. He said India was looking into resuming its civil nuclear energy cooperation with Canada, especially for sourcing uranium fuel for nuclear power plants. Canada, incidentally, was the first country to have completed all the formalities for civil nuclear cooperation with India in 2008. Canada sits on vast uranium reserves, and is one of the largest uranium producers in the world.

On this front, Canada, too, has been making overtures in the last few years. Late last year, Brad Wall, Premier of the province of Saskatchewan in Canada, let it be known that he was discussing sale of uranium to India along with proposals for partnering with India in clean coal technologies.

In fact, going by media reports here, Modi’s focus on this three-nation foreign tour will be garnering investments in energy, security, space and military sectors, under his favorite project’s mantle – Make in India.

One report also suggests that problems related to nuclear liability will be discussed by Modi and his French counterpart, President Francois Hollande. French company Areva is involved in the 9,900-megawatt Jaitapur power plant project in India.

In recent times, India has been bullish on acquiring fuel for its reactors, and Modi’s European and Canadian trip will only serve as one more opportunity for that.


It should come as little surprise that India was among the first nations to welcome the historic agreement reached between the US and Iran recently on the latter’s nuclear program.

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India’s external affairs ministry responded to the development by releasing a statement Friday, saying it (India) welcomed the understanding announced in Lausanne between Iran and the E3+3 on Iran’s nuclear ambitions.

“A significant step seems to have been taken with agreement on the parameters of a comprehensive settlement to be negotiated by June 30,” the statement said.

Secretly, Indian government officials must have let loose a sigh of relief over the agreement, since two of their most important, modern-day allies could now be seen by the world to be on the same side of the “Us versus Them” debate. One wherein the definitions of “Us” and “Them” have changed dramatically in the past year, accounting for the new twists and turns in geopolitics.

US vs. Them Scenario

India is not new to the “Us versus Them” scenario where Iran and the US are concerned. Twice earlier, it had voted with the US in the UN on Iran’s nuclear program, a move that was seen as an “abandonment” of Iran, its traditional ally. For example, in February 2006, India, with 26 other nations, had decided to refer Iran to the UN Security Council, much to the consternation of not only the then-Iranian government, but also to the alarm of many in India’s political circles.

It would not be wrong to say that India has been a reluctant client in joining the Western powers in their crusade against Iran.


With Iran and the US coming to terms over the Islamic Republic’s nuclear program, India finds itself in an enviable position where all the players in the game have aligned on the same side – one big “Us,” Israeli protests not withstanding.

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Moving forward, India will be more than willing to sign on the dotted line on several deals in the pipeline with Iran, especially in the steel sector. In March, Iran’s Deputy Industry Minister, Mehdi Karbasian, was quoted by Azer News saying Iran was ready to accept Indian investment in the steel sector, and “planned to start activity in the country.”

Along with India, a large number of other foreign mining companies including some from Kazakhstan had already visited Iran in the past year, looking for similar investment opportunities.

New SAIL Facility

At the start of 2015, India’s state-run Steel Authority of India (SAIL) had announced a proposal for a multimillion dollar, nearly 2 million-metric-ton integrated steel plant in Iran.

SAIL has already asked the Iranians to provide 500 hectares of land near the country’s Bandar Abbas port and another 500 hectares of contiguous land for future expansions.


It was supposed to be a test case for the stainless steel industry of India.

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One of the country’s leading steel makers, Jindal Stainless Ltd. (JSL), had applied to the government for the imposition of a safeguard duty on foreign stainless steel, but the Directorate General of Safeguards (DGS) rejected the application, much to the consternation of JSL and the rest of India’s stainless steel industry.

The DGS falls under the Finance Ministry’s Department of Revenue. In its order, the DGS ruled JSL had failed to prove that there was “injury to the domestic industry as a result of the cheap imports.”

A JSL spokesperson told The Economic Times that the company was disappointed with the ruling.