Update on Sesa's
Pig Iron and Coke
- P.F.X.D’Lima , Director Group Resources, Sesa Goa Ltd.
Sesa Goa is
better known the world over for its core iron ore business for almost
50 years now. Its experiment in diversification into Pig Iron and Metallurgical
Coke is a comparatively recent experiment intended to provide its Indian
shareholders the opportunity for growth into higher levels in the steel
chain. Unfortunately, due to a squeeze on the profits of the steel related
products those businesses have not yet yielded the desired results.
However, those businesses have now been brought up to higher efficiencies
and is expected to yield better results in the future.
The first experience was that of Pig Iron. In 1990 almost all locally
produced pig iron was in the integrated steel plants and therefore of
“basic” quality suitable for steel making. The foundries in India had
to add significant quantities of ferroalloys to the basic hot metal
to make good castings. With the liberalisation of licencing for pig
iron in 1988 Sesa was the first Company to set up a mini blast furnace
using the Brazilian mini blast furnace technology from KORF TECHNOLOGIA
SIDERURGICA to produce foundry grade pig iron in 1992. The product caught
on fast in the foundry market and commanded a premium price over the
locally available pig iron with the market price settling around that
of imported Brazilian pig iron with import duty and transport. The idea
caught on fast and today there are 26 mini blast furnaces installed
all over the country.
Sesa’s management realised that metallurgical coke was a key component
in the structure of hot metal costs. With the commissioning of the second
blast furnace in 1994 and the formation of a separate company SESA INDUSTRIES
for the manufacture of pig iron the SESA GROUP also started another
Company SESA KEMBLA COKE CO. LTD. as a joint venture with Kembla Goa
Holdings using the proven non-polluting, non-recovery technology from
Kembla Coal & Coke Pty. Ltd of Australia.
Unfortunately the ovens failed in their design and technology. However,
their shareholders SESA was able to construct successive prototypes
with substantially modified designs and has now rebuilt all 84 ovens
to the new design. A patent application for the new design has been
filed. Meanwhile the technology which is most successful in terms of
superior coke quality and much lower levels of emission than those of
its competitors has now been licenced to ENRON ENGINEERING & CONSTRUCTION
COMPANY LTD. of the USA and to TOYO ENGINEERING CORPORATION of Japan
on a worldwide exclusive basis.
Most of the mini blast furnaces in the country import metallurgical
coke, mainly from China. The import duty of this coke has recently been
reduced from 15% to 5% and blast furnaces are exempted from antidumping
duty. Whereas these measures will give immediate relief to the cost
structure of the indigenous pig iron industry it will make it more dependant
on the import of coke from China and the vagaries of the world coke
market which is principally dependant on Chinese coke exports. In the
long term these steps would retard the development of the coke production
in the country, though the SESA ENERGY RECOVERY COKE TECHNOLOGY would
still be attractive, particularly with the high prices of electrical
energy in India.
The coke ovens of SESA KEMBLA are performing satisfactorily. With the
supply of coke of superior quality and better sizing the mini blast
furnaces have also improved in performance both in terms of productivity
(close to 2 for foundry grade pig iron using lumpy ore) and in terms
of coke rates. The proposed power plant to be set up on a BOO basis
using coke oven waste gas and surplus B.F. gas is expected to provide
reliable electrical supply to both units and the sales of power to third
parties will improve the economies of both businesses.
With that SESA will have a mini integrated facility with the production
of iron ore, met. Coke and hot metal under the management of the SESA
GROUP. Undoubtedly that would be a turning point for the SESA pig iron
and coke businesses which will hopefully achieve their originally intended