Pollution in the Steel Industry
Pollution in the Indian Steel Industry takes place because of the poor quality of raw materials used.
Published on: Mar 4, 2016
Transcripts - Pollution in the Steel Industry
Political Economy of
Environmental Pollution In The
Indian Steel Industry
Economic Research Unit
Joint Plant Committee
The Indian Steel Industry Is
Slammed For Its Pollution
The Recent Survey on Steel
and Environment Pollution
Reveals that the Indian steel plants are rather
low on pollution.
Co2 emissions in tonnes of
carbon/tonne of steel produced
• Global best practice: 1.4
• India’s best is Essar Steel (DRI) 1.4
• Tata Steel 2.7
• Usha Martin (India’s worst) 4.2
Producing steel in India is thus
Thrice as polluting as the global best practice.
Yet, India is steadily going up on
the steel scale
WORLD CRUDE STEEL PRODUCTION 2009
C.I.S. (6), 97.36,
North America, 82.25,
Middle East, 16.59,
Africa, 14.84, 1.21%
India, 56.61, 4.62%
Rest Asia, 151.88,
Oceania, 6.01, 0.49%
• It is the
What makes the Indian steel plants
• Government denial
• Ignoring of mass movements against pollution.
• Always assuming that the role of the government
is to promote profits for steel companies.
Today most community issues
around steel are about pollution
What causes pollution?
Steel is naturally polluting
• Since it uses coal and iron ore whose combustion
releases various PAH compounds and oxides into the
• However technological interventions in the form of air
filters, water filters and other water saving, power saving
and closed container can reduce pollution to near zero
• Unfortunately, the Indian steel plants, despite using good
and standard global technologies do not seem to be able
to control pollution.
• The most probable reason is that they do not use the
recommended levels of raw materials.
The crux of
seems to lie in
the quality of
Let us look at some fundamentals
which lead to the poor quality of
The Indian steel industry
before economic liberalization
was based upon
• Large integrated steel
plants like SAIL and RINL
in the public sector and
Tata Steel in the private
• They produced steel
through iron ore.
• A host of smaller electric
• They produced steel
As India’s demand for steel picked due
to urbanization and economic growth,
the large plants could not supply steel
• So the smaller plants were called upon to
fill the gaps.
• As the smaller plants’ production
increased, the demand for scrap grew.
• Scrap prices rose.
• DRI industry was born.
Structure of the Steel Industry
Indian Steel Industry
= iron + steel
How did the DRI people get
• Through the grant of private leases.
• A legacy of the colonial times.
• Mining is a state subject and is not
• The public sector also gained from such
Iron Ore was in fact low value
• One could only use lump haematite ore.
• We were on contract for export to Japan.
• Since the integrated plants had captive
mines we relied on private mine owners to
export iron ore to Japan.
• Mining was low valued; Japan being a
very large buyer pressed prices of ore
The good market was only in
The fines were usually cast away as
waste. Now DRI made good use of
these and also helped replace scrap as
feeder in EAF.
But by 2004, China emerged with a
• Started importing iron ore.
• Was it all needed for consumption?
• No; it was a means to buy up commodities
because otherwise no country in the world
would have the money to buy its products.
• Natural resources was the new opium.
China’s manufacturing base was so
strong that all it could import was
• A new natural resource economy
• Speculators and financiers were
speculating in mineral ores to collect
money to be able to buy the Chinese
• Freight business developed.
Everywhere mineral properties
were on the upswing
• There was a rush in Indian mining.
• Super profits for Indian miners.
• They exported out and put the rejects into
the rotary kiln for manufacture of DRI.
• This is how the DRI became such a
• It was actually a clean technology.
In short there was an over
export of iron ore
The Karnataka Lokayukta report
shows the enormous extent of
illegal mining and exports.
In fact, even the public sector
companies like the NMDC and
KIOCL also smuggled iron ore
• And because of rising prices of iron ore,
steel prices increased.
• People exported more ore in order to keep
steel prices high.
The more iron ore was
The worse the quality of ore in the
DRI kilns got.
Across the steel sector, the profits
Production and Consumption of Steel 2010-11
in thousand tonnes
Sale Imports Exports Consumption
In thousand tonnes
Pig Iron 5541 9 358 5153 388
Sponge Iron (DRI) 26709 0 0 26701 8
Semis for Sale 25272 339 350 25293 -21
Finished Steel 61799 5906 3039 64252 -2453
Source: JPC, 2012
Finished steel production did
Only iron based products grew
The reasons were
• Steel production did not yield as much
profits to the investors and export of iron
• So raw material was diverted.
• The people who had larger market shares
only produced steel and there was
• India is one of the richest sources of iron ore.
• It has a deposit of 9602 million tonnes of
haematite ore and 3408 magnetite ore.
• This can produce 650 million tonnes of steel.
• This is ten times the present production.
• Or may last us for ten years from now.
• The Indian steel industry is expected to grow by
8% annually; which also means that the ores
may exhaust in the next ten years.
There was also one reason for the
iron ore trade
• China became a large supplier of coal and
• Indian ore exporters also imported coal.
• As coal prices in China rose, less was
available for India.
• More iron had to be exchanged to get
The poor quality of coal
Also caused pollution in steel
Coal too was over mined illegally
• In some cases it was over exploited and
• In certain cases private allottees just sat
over mines to raise coal prices so that
they could make profits.
• Many such mine allottees were steel
producers, who did not use the coal to
make steel but to sit on supplies for super
And only low quality coal was
Pollution Causal Flow
not BF and DRI
Of raw material
Ore is mined
Used in DRI, BF