India will stimulate iron ore enrichment for the needs of steelmakers

India will stimulate iron ore enrichment for the needs of the steel industry and its transition to environmentally friendly steel production. This is reported by BigMint.

It is expected that steel production in the country will reach 200-210 million tons by 2029/2030 fiscal year, which is 40-47% more than in 2023/2024 fiscal year.

This rapid growth will lead to a sharp increase in domestic consumption and iron ore production. According to BigMint, iron ore production will reach approximately 390 million tons by FY2029/2030. However, the availability of raw materials with a higher iron content remains a question mark.

In FY2023/2024, India’s supply of iron ore with an iron content above 65% decreased by 20% y/y – to 32 million tons. The supply of iron ore with an iron content of 62-65% has increased markedly, but only after a period of sharp decline over the past few fiscal years.

In contrast, the country’s production of iron ore with an iron content below 58% increased from 17.08 million tons in FY2018/2019 to almost 54 million tons in FY2021/2022, and has remained at about the same level since then.

This poses serious challenges for the production of high quality steel grades and the development of the iron-dependent direct reduced iron (DRI) IF-EAF route, as well as the use of domestic raw material reserves to support the rapidly expanding steel industry.

As India’s DRI capacity grows, the rapid deterioration in the quality of domestic iron ore is a serious problem, and enrichment is the need of the hour for the country.

India’s iron ore enrichment capacity is likely to increase to 143 million tons in FY2024/2025 and 170 million tons by FY2029/2030 from the current 136 million tons. The largest share of this capacity is currently in Odisha (almost 35% of the country’s total capacity).

The Indian government is developing a policy to enrich low-grade iron ore in order to increase steel production by making the best use of local raw materials. According to reports, the relevant ministry will soon finalize this work.

As GMK Center reported earlier, India increased iron ore production to a historic high of 282 million tons in 2023, up almost 14% year-on-year. In particular, miners increased volumes due to stimulated demand from rising steel production in the country, and export potential increased.