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The production of sponge iron in India started about three decades ago triggered by the fact that in the mid-1970's, Indian mini-steel plants started examining the viability of setting up sponge iron plant. Since India has adequate coal deposits, production of coal based sponge iron was considered a feasible option. The growth of the DR industry till the mid 1980 was slow largely because of restrictive licensing. It was only after delicensing in 1985 that the industry expanded rapidly.
Four main sources of metallics for steel making are scrap, hot metal from blast furnaces (BFs, including its variants) as well as from smelting reduction (SR) process, DRI/HBI and iron carbide. Traditionally, scrap has been the main feed to EAFs. With more and more continuous casting (CC) the generation of scrap has reduced drastically. Even in a developing country like India, CC has been extensively used to enable steel to remain competitive. Today steel industry is facing a situation of less generation of scrap accompanied by greater demand. Nevertheless, it needs to be emphasized that scrap will continue to remain the major feed for EAFs. At the same time, the quality of scrap may at best remain at today's level, and pre-reduced material will gradually substitute more and more scrap in making high quality steels. Consequently, the supply of sponge iron (also referred to as DRI) is expected to grow to the level of 50 MTPA in 2010 against 30 MTPA today. Liquid hot metal and solid pig iron would also be used to larger extents.
The state of Chattisgarh is blessed with rich deposits of non coking coals suited to sponge Iron manufacturing. Iron Ore is also available in nearby state of Orissa. As a result of which several Mini Sponge Iron Plants ( approx 30 units ) have stared in this region and many others are in the pipeline.
Power Generation :- One of the biggest advantage and opportunity in Sponge Iron Industries is that making of Power through waste gases at very low cost per unit and this is proving to be more profitable than sale of Sponge Iron. This means that electrical power could become prime product with Sponge Iron. And as tariff for Power Supply is high we can sell the Power (by paying very nominal wheeling charges to the sate Govt.) to nearby small industries at lower rates and can earn revenue from Power.
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