Trans Indian Inst Met (2016) 69(1):107115

DOI 10.1007/s12666-015-0719-1

TECHNICAL PAPER

National Steel Policy: Challenges Before Iron Ore Producers

G. V. Rao1 S. K. Sharma1

Received: 7 January 2015 / Accepted: 7 October 2015 / Published online: 24 November 2015
 The Indian Institute of Metals - IIM 2015

Abstract The National Steel Policy 2005 estimated

domestic steel production of 110 MTPA by the year
20192020, which was revised by the National Steel
Policy 2008, envisaging domestic steel production of the
country to be 180 MTPA by 20192020. About 2.5 tonnes of ROM iron ore or 1.72.0 tonnes of processed iron
ore is required for one tonne of steel production. To meet
the projected steel production of 180 MTPA by
20192020, the iron ore requirement have to be in the
order of 500 MTPA which includes long term projected
export contracts of around 100 MT. Raw materials are
crucial in determining the competitive growth of steel
industry as this is an input-intensive extractive industry.
Situation calls for proportionate development expansion
in adequate raw material supply to meet the demand of
Indian steel Industry. India is almost completely self
sufficient with regard to iron ore but with future steel
production envisaged, an adverse impact on the reserves,
position is rather imminent. The existing reserves of
hematite (averaging around 63 % Fe) are the only source
of iron ore and as such, these reserves may not last
beyond 2530 years at the present rate of consumption.
Hence, to meet the future and projected requirement,
additional domestic resources have to be created. The
ores and minerals are site specific, non-renewable and
finite. It is a challenging task for iron ore producers to
meet the demand as per the national steel policy. In order
to meet the demand, the iron ore producers has to face
challenges like increasing the resource base, increasing

& G. V. Rao
vrgottumukkala@gmail.com
1

R&D Centre, NMDC Limited, Hyderabad, India

production and productivity, utilisation of low grade iron

ores, beneficiation of low grade fines and slimes, overcoming the infrastructure bottlenecks like roads, railways, ports, power, capital and water, human resource,
handling, storage and utilisation of slimes/tails, encouragement for R&D activities, adopting environmental
friendly measures and land acquisition for setting up new
plants. In this paper all the above aspects are discussed
thoroughly.
Keywords Iron ore
National steel policy
Challenges

Beneficiation and utilisation of low grade ores

1 Introduction
The development of the steel industry has a positive
influence on the growth of any countrys economic
development. To accelerate the growth rate of steel sector
and to attain vision of becoming a developed economy by
2020, the Ministry of Steel formulated the National Steel
Policy (NSP) in 2005. In this policy proposal importance
has been given in increasing the iron ore production
capacity in line with expected demand. Further, to make
Indian steel industry internationally competitive, due
attention has been given on the cost aspect.
Iron ore is the main raw material for production of pig
iron/direct reduced iron (DRI) from which steel is produced.
Around 1.52.0 tonnes of iron ore is required for production
of one tonne of liquid steel. India produced 81.2 million
tonnes of crude steel during the year 2013 [2]. The estimated
steel production of India is expected to be three fold by the
year 20192020 from the existing level. To meet such target,
there is a need for proportionate increase in production of
raw materials particularly the iron ore production.

123

108

3.4
5.3
Orissa

12.3

33.9

Jharkhand
Chasgarh
Karnataka

18.8

Goa
Others

26.3
Fig. 1 State wise total resources of Iron ore (Hematite) as on 01-042010

Producon (million Tonnes)

Indian steel sector contributes to nearly 2 % of the Gross

Domestic Product (GDP) and employs over 5 lakh people.
India became the 4th largest producer of crude steel in the
world in 2010 as against the 8th position in 2003 and is
expected to become the 2nd largest producer of crude steel
in the world by 2015 [3]. Going by the estimate of Rs. 5000
crore investment per million tonne of additional capacity,
intended steel capacity build up in the country is likely to
result in an investment of Rs. 8,70,640 crore by 2020.
National Steel Policy (revised 2008), envisages domestic steel production of the country to be 180 million tonnes
per annum by 20192020 [4]. To meet such demand of
domestic steel industry, run-of-mine (ROM) iron ore
requirement will be over 500 million tonnes per annum as
against the present level of production of 150 million
tonnes (20132014).
Almost all the present day iron ore production comes
from hematite reserves. India is almost self sufficient with
regard to iron ore, but with future steel production envisaged it will have impact on its reserves. Existing hematite
reserves of 8.09 billion tonnes as on 01.04.2010, may last
for 1520 years maximum [1]. Hence, creation of additional domestic resources is crucial.
This increase in iron ore production has to take place in
a balanced manner. This will pose many challenges to the
iron ore producers. These challenges may be in securing
the raw material supply (iron ore) in terms of quantity and
quality, infrastructure development, water management,
human resources, Government policies, environmental
norms, law and order situation, beneficiation of lean/low
grade iron ores, storing, utilisation and management of
tailings.

Trans Indian Inst Met (2016) 69(1):107115

Iron ore Producon (India)

300
245
250

230 240

220

202
181

200

152

144 150

120.6

150
86.4

100

99.1

50
0
2000

2002

2004

2006

2008

2010

Iron ore producon (World)

294029302950

123

Million Tonnes

3000

As per the United Nations Frame work of Classification

(UNFC) of mineral resources, total resources of iron ore in
the country is around 28.52 billion tones (National Mineral
Inventory) as on 1.4.2010 [1]. Hematite and Magnetite are
the principle ores of iron. Of the estimated 17.88 billion
tones of hematite available, 8.09 billion tones are under
reserve category and 9.79 billion tones under remaining
resources category, where as total reserves of magnetite
are estimated at 10.64 billion tones of which reserves are
merely 0.02 billion tones while 10.62 billion tones are
remaining resources [1].
Around 96 % of hematite resources are confined to the
states of Orissa, Jharkhand, Chattisgarh, Karnataka and
Goa. The remaining resources are spread in the states of
Maharashtra, Madhya Pradesh, Uttar Pradesh, Rajasthan,
Assam etc. The state wise reserves and remaining resources
are presented in Fig. 1 [1].

2014

Fig. 2 Iron ore production of India during 20022013

3500

2 Iron Ore Resources and Production

2012

Year

2590

2500
1800

2000
1500

1080 1160

1340

2000

22202240

1540

1000
500
0
2000

2002

2004

2006

2008

2010

2012

2014

Year

Fig. 3 Iron ore production of World during 20022013

Indian Iron ore production has increased gradually from

86.4 million tonnes to 245 million tonnes during 2002 and
2009 and has decreased to 230 million tonnes in 2010. The
iron ore production has slightly increased to 240 million
tonnes in 2011. After 2011 the iron ore production
decreases to 144 million tonnes due to closure of iron ore
mines as per supreme court verdict. The iron ore production trend of India and world are shown in the Figs. 2 and 3
respectively.

Trans Indian Inst Met (2016) 69(1):107115

At present, the in situ reserves of relatively rich iron ore

in India are 17.88 billion tonnes of haematite and 10.64
billion tonnes of magnetite ores (total 28.52 billion Tonnes). Though the reserves of haematite ore appear to be
large, high-grade lumpy reserves constitute only 8.7 % of
the total. Further, the present commercial mining capacity
for iron ore is only 175 million Tonnes (MT). Production of
iron ore in 20042005 was 145 MT, of which 54 MT was
domestically consumed and 78 MT was exported. Of the
600 mining leases, only 246 were operated in 20032004.
In order to ensure availability of 190 MT of iron ore for
domestic production of steel by 20192020, Government
must encourage investments in creation of an additional
modern mining and beneficiation capacity of 200 MT. The
size of these investments will be around Rs. 20,000 crore.
The current policy of captive mining leases for the private
sector has to continue, but it is necessary that investment
plans be put in place for idle mining leases. State governments has to recommend renewal of existing leases only
against credible mining investment plans in a specified
period. The Central Government has to lay down priorities
and guidelines for the State governments to recommend
fresh mining leases, having regard to the entrepreneurs
mining investment plans and technical and financial
capabilities. Environmental and forest clearances has to be
granted within a pre-specified time frame. Though local
value addition has to be given priority, the Government has
to encourage iron ore trading in order to make this essential
raw material available to the iron and steel industry
throughout the country. The Government has to encourage
investments in adding value to iron ore mines. Scientific
mining and economies of scale also to be encouraged
through consortia of small users and by prescribing a
minimum economic size for mines.

3 Challenges before Indian Iron Ore Producers

109

struggle to maintain iron ore inventory. The port infrastructure in the country is not geared enough to meet this
long term heavy import demand. Due to these constraints
the lead time of imported iron ore supply becomes quite
large and often unreliable. The inland transport and Port
infrastructure needs to be enhanced in a planned way so as
to facilitate the iron ore supply to steel plants and reliable
iron ore import tie ups. Table 1 presents the expected and
present steel production, consumption, imports and exports
of steel for the year 20042005 and 20192020. Table 2
presents the requirement of critical inputs for production of
steel for the same period.
3.1.1 Inland Transportation
It is estimated that every tonne of steel production involves
transportation of 4 tonnes of material [4]. The envisaged
addition of 75 MT of steel annually implies 300 MT of
additional traffic. In a globally integrated economy, minimization of the overall cost of transportation becomes an
important instrument of maintaining the competitive edge
in both the domestic and overseas markets. Table 3 below
shows the year-on-year growth in gross capital formation
for Railways and Transportation by other means.
3.1.2 Railways
Railways transport iron ore and coal from mines and ports
to the plants, and steel to ports and consuming areas.
However, over the last decade railways has been consistently losing traffic originating in the steel sector to the
roads. The share of railways in transporting finished steel
has declined from 71.9 % in 19911992 to 34.4 % in
20012002. The decline has been largely due to railways
competitive weakness in the face of challenges from other
modes of transport like roads, pipeline and coastal shipping. Replacement of the equalized railway freight by

3.1 Infrastructure [9]

Evacuation of mined iron ore remains a key constraint for
which a unified concerted effort between Iron ore Miner
and Indian Railways is required. Important modes of
transport of Iron ore is Railways, Road, Conveyor Belts
and the Multi Modal Rail-cum-Sea Route. The share of
these modes of transport in the total movement of iron ore
is approximately as under: Railways (Including Rail-cumsea): 69 %, Road: 25 %and remaining through miscellaneous ways.
However, there are a few iron ore mines in the country
which have huge production potential but are barest of rail
linkages. The Iron ore transport infrastructure in the
country is already strained, making most of the steel plants

Table 1 Production, imports, exports and consumption of steel (in

million tonnes) [9]
Year

Production

Imports

Exports

Consumption

20192020

110 (180)

26

90

20042005

38

36

CAGR

7.3 %

7.1 %

13.3 %

6.9 %

Table 2 Critical inputs for steel production (in million tonnes) [9]
Year

Iron ore

Coking coal

Noncoking coal

20192020

190 (310)

70

26

20042005

54

27

13

123

110

Trans Indian Inst Met (2016) 69(1):107115

Table 3 GCF in transport related infrastructure (Rs. Crore)

19971998
Railways

19981999

5069

Transport by other means

5019 (-0.99)

16,460

18,153 (10.3)

19992000

20002001

20012002

20022003

20032004

5307 (5.7)

5491 (3.5)

6981 (27.1)

8860 (26.9)

11,609 (31.0)

21,272 (17.2)

25,802 (21.3)

21,117 (-18.2)

16,476 (-22.0)

29,872 (81.3)

Source National Accounts Statistics20042005

Table 4 Expected traffic originating in the steel sector to be handled

(MT) [9]
20042005
Railways

20192020
Road

Railways

Road
100

Raw materialsa

80

34

230

Finished steel

11

27

33

77

Total

91

61

263

177

Excluses traffic due to export of iron ore

freight ceilings is also partly responsible for the modal

switch.
On the basis of the present share of railways and roads in
the movement of raw materials and finished/saleable steel,
the expected and present traffic originationg in the steel
sector is presented in Table 4.
Based on the average lead distance over which the
freight needs to be computed for raw materials for steel
making and finished products, it is estimated that the total
traffic generated for railways originating due to the iron
and steel industry will be around 120 billion tonne kilometer by 2020. The total traffic for railways including
export of iron ore will be around 150 billion tonne kilometer. This estimate, however, may change somewhat
depending on the exact location of the new (green-field)
plants and mines coming up in the next two decades.
Therefore, there is a need for the railway facilities, to
expand substantially, in view of the renewed investor
interests in the creation of additional steel capacitiesboth
in green-field and brown-field projects. The outlay for
railways as a percentage of total plan outlay has come
down from 10.3 percent (up to 4th Plan) to 6.8 % (10th
Plan). Resource constraints may necessitate participation
by the steel industry in the creation of railway infrastructure, especially in the capital-intensive areas of laying
tracks and procuring wagons. Besides ensuring availability,
there is a need for the railways to re-examine their freight
structure and improve quality of services. Dedicated freight
trains in the private sector has to be encouraged.
3.1.3 Roads
Similarly, the existing road network needs to be expanded
and strengthened considerably for reducing the transaction
costs of the Indian producers. The steel plants and mines

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need to be integrated with the on-going programmes of

national highway development and also with the proposed
rural road schemes for expanding the delivery chain of
steel across the country, especially the rural areas.
Geographical coverage of the country by road transportation remains woefully low despite the quantum jump in
construction of roadways across India in the recent years.
Performance of the Indian road sector is poor in terms of
effective sustained velocity of movement. This is demonstrated by the fact that roads now carry an overwhelming
85 % of passenger traffic and 70 % of freight, and that the
highways account for around 40 % of this movement while
make up only 2 % of the overall road network. The steel
industries have to be encouraged to create links to the nearest
available highways. But the task of expanding the highway
network has to continue through publicprivate partnerships.
3.1.4 Ports
After liberalization of the economy, the Indian steel
industry has become highly dependent on port infrastructure both in terms of imports of critical input materials like
Iron ore, coal and coke and export of saleable steel.
Keeping in view the strategic goal of achieving a production of 110 MT of steel per annum and an annual export
level of 26 MT by 20192020, the port facilities also have
to be expanded substantially. The projected bulk to be
handled at ports is shown in Table 5.
The current Government policy allows private capital in
port development. Iron ore producers has to be encouraged
to develop port and berth facilities so as to improve productivity, turnaround time, capacity to handle larger vessels and other operational parameters of efficiency.
3.1.5 Power
The additional requirement of power for the steel industry
may become 7000 MW by 20192020, requiring an additional investment of Rs. 24,500 crore. The Electricity Act,
2003 and the National Electricity Policy allows captive
generation of power and trading of surplus power. This will
facilitate growth of investment in captive power plants by
the steel industry. At the same time the Government has to
encourage the industry, and the secondary sector in particular, to bring down the specific consumption of power.

Trans Indian Inst Met (2016) 69(1):107115

111

Table 5 Growth in port traffic between 20042005 and 20192020

Bulk to be handled at ports

CAGR

20042005

20192020

Import

Export

Total

Import

Export

Total

19.3

78

97.3

85

100

185

4.4 %

Steel

26

32

11.8 %

Total

21.3

82

103.3

91

126

217

5.1 %

Raw materials

Including iron ore

Table 6 Cost of capital [7] (% per annum)

Japan

USA

Germany

China

S. Korea

Brazil

India

World

2.4

6.4

4.2

56

9.75

14

3.2 Financial Resources

In order to achieve the strategic goal of 110 MT of steel
production by 20192020, the industry need an additional
capital to the tune of Rs. 230,000 crore. In addition, funds
are required for technological upgradation of existing
facilities. However, the outstanding advances of the
banking sector to the industry at the end of 20032004
stands at only Rs. 26,295 crore. The cost of capital in India
is among the highest as shown in Table 6 [5, 7].
To mobilize such vast resources, direct foreign investment has to be encouraged. In addition the external commercial borrowing norms need to be reviewed periodically
to facilitate smooth inflows of debt, and to bring down the
cost of capital. Iron ore industry is one of the six sectors
that figure in the index of industrial production for infrastructure, but the fiscal incentives available to the
infrastructure projects are not available to the Iron ore
industry. So there is a need to devise suitable incentives for
the Iron ore producers.
3.3 Human Resources
The anticipated Iron ore production of 500 MT by 2020
require an additional workforce of 220,000 after accounting for the expected productivity improvements. Further
the creation of 1 man-year of employment in the steel
industry generates an additional 3.5 man-years of
employment elsewhere in the economy due to its strong
linkages with other sectors such as transport, mining,
construction, machinery, and steel fabrication. The total
additional employment generated in the economy due to
expected production of 500 MT by 2020 has to be around 1
million.
The profile of the required human resources will have a
larger share of the skilled and semi-skilled labour force. It
is a matter of concern that availability of scientists,

engineers and technicians per thousand of population in

India is 7.05 compared to 113 in Japan, 90 in U.K., 53 in
Korea, 54 in Australia and 85 in Germany. Further, the task
is not limited to increase the stock of technical manpower.
The technical and professional institutes of the country are
also be required to impart new competencies and capabilities in tune with changes in technology and the needs of
globalization. The existing training and research institutes
under the Ministry of Steel has to be brought under an
umbrella organization with representation from each segment of the industry. The functions of this organization
may include (a) suitable training programmes especially
for the secondary small scale units, (b) promotion of steel
consumption through dissemination of information on
availability and suitability of steel for various applications
and (c) collection and analysis of data on important
parameters of the industry.
3.4 Technologies, Research and Development
Though the choice of technology will be determined by
entrepreneurs based on techno-economic considerations,
the Government has to encourage adoption of technologies,
which:

Have synergy with the natural resource endowments of

the country.
Are conducive to production of high-end and special
steel required for sophisticated industrial and scientific
applications.
Minimize damage to the environment at various stages
of steel making and mining.
Optimize resource utilization.
Facilitate modernization of the Iron ore industry so as
to achieve global standards of productivity and
efficiency.

Indias expenditure on Research and Development has

been negligible not only in absolute terms but also as a
percentage of GNP at 0.86 %. This can be compared to the
developed world with an average ratio of 2.5 %. In the case
of steel industry, the ratio of expenditure on R&D as a
percentage of turnover is only 0.26 % [12].

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The low priority to indigenous R&D has given rise to

adoption of technologies that are more suited to conditions
prevailing in the developed world. For example, resource
position of raw materials requires development of technologies, which can use indigenous coking coals and noncoking coals and for improvement in quality of high alumina Indian iron ore. But lack of innovation and adaptation
to Indian conditions result in large-scale import of coking
coal and low performance in iron making. Aggressive
R&D efforts therefore, has to be mounted to create manufacturing capability for special types of steel, substitute
coking coal, enrichment and agglomeration of iron ore
fines, develop new products suited to rural needs, enhance
material and energy efficiency, utilize waste, and arrest
environmental degradation. Public sector steel companies
can enhance R&D expenditure in the coming years to
finance internal R&D efforts and sponsor outside research,
which may provide a framework for inter-disciplinary
cooperation with the private sector across national boundaries. Governments contribution to fostering basic and
applied R&D will be enhanced.
3.5 Environmental Concerns
With a view to make various operations in Iron ore Mines
environment friendly, environmental audit and life cycle
assessment of existing iron ore mines has to be encouraged
so that the relevant processes reduce emissions and effluents, minimize and better manage solid waste generation,
and improve resource conservation such as energy and
water. There are some fine examples of high-level environmental performance in the steel sector already. However, the Iron ore producers must join the efforts of other
industries to improve environmental performance even
more. A similar policy has to be followed in assisting
natural resource industries, such as iron ore and coal
mining, where scientific mining and mineral processing can
be encouraged.

Trans Indian Inst Met (2016) 69(1):107115

export of steel through project exports, need to be

encouraged.
3.6.2 Imports
Import duty rates have been brought down progressively in
the post-deregulation period. The Indian steel industry has
been able to successfully withstand the competitive pressures of overseas producers. However, integration with the
global economy requires that the industry need to be protected from unfair trade practices, which become common
especially during the periods of downturn. The Government must, therefore, institute mechanisms for import
surveillance, and monitor export subsidies in other
countries.
3.7 Investment Promotions and Policy
Implementation
The very nature of Iron ore production, especially through
the mechanised mining route, requires a number of clearances from the central and state governments for investment in the mining sector. Delays at various levels not only
add to project costs but also discourage fresh investments.
Hence a suitable executing mechanism will be evolved to
discharge the following functions:

Provide a single-window clearance for large projects, to

be followed by statutory clearances by the concerned
ministries.
Prepare and implement road maps for technological and
productivity improvements, benchmarking them to
global standards.
Monitor the implementation of the National Steel
Policy.
Conduct reviews to remove infrastructural, procedural
and institutional bottlenecks and to achieve policy
coordination among central Ministries and State
Governments.

3.6 Trade Policy

3.8 Global Economic Slowdown
3.6.1 Exports
It is estimated that the country will achieve an export ratio
of around 25 percent of the total production in 20192020
from 11 % in 20042005 [2]. This is comparable with a 30
percent share of exports in global production. The
Government will support all efforts to make available
export credit, provide trade information, and cut transaction costs in general. In view of the slow progress of multilateral negotiations, Government has to focus on regional
trade agreements to broaden the export base. Exports of
value-added steel and steel products, including indirect

123

Post the Global Recession of 2008/2009, the economic

development and growth across most of the geographies
has slowed down, affected by contracting liquidity and
capital impacting investment & trade activities resulting in
depressed demand. Most of the advanced economies reeled
under the pressure of rising debt, deficit and unemployment
while emerging & developing economies encountered high
inflation, elevated interest rates, sharp depreciation of
exchange rates with declining Industrial production,
reducing Savings & Investment and decelerating trade
opportunities while commodity prices continued to rule

Trans Indian Inst Met (2016) 69(1):107115

strong with high degree of volatilitythus adversely

impacting the margins & profitability across various sectors including steel.
The intensity of the Global Recession is proving to be
far deeper, wider and longer than initially anticipated. The
World-Today is definitely slower across most of the macroeconomic indicators vis-a`-vis Pre-Recessionary times.
Domestic Demand has become extremely precious and
dearer across economies and sectors and to every Business
entity. World-Today is plagued by capacity far in excess to
demand which has led to growing Trade Remedial measures by various economies with the sole objective of
securing the domestic market from the growing threat of
imports of surplus under duress and distress. Steel is no
exception to this fact as can be seen from the growing
surplus from 17 % in the Pre-Recessionary times to 26 %
today [8].
3.9 Environmental Problems, the Policies,
and the Governance Issues
Iron ore mining impacts the environment and ecology to an
unacceptable degree, unless carefully planned and controlled. Some of the environmental impacts are felt
immediately, while others are perceived over the long term.
The magnitude of the environmental impacts, however,
vary with the method of mining, scale and concentration of
mining activities, geological and geomorphologic setting of
the area, nature of deposits, land use pattern before the
commencement of mining operations, natural resources
etc. The major environmental problems are destruction of
forest and Biodiversity, Air pollution, Land degradation
and stress on water resources.
3.10 Resource & Reserve Assessment
and Identification of New Resources
Promote scientific exploration for expanding the Iron ore
reserves in India to its full potential. Better estimation of
Iron ore reserves is critical for strategic planning. Currently
only geological resources are estimated (28.5 Billion
Tons). India lags behind Australia in geophysical and
geochemical data generation. Indias spend on exploration
projects is low, at 0.3 % [10] of the global spend (compared to 19 % for Canada and 12 % for Australia) leading
to a stagnant reserve base for all mineral categories.
Amount spent on exploration per square kilometer in India
is one of the lowest among the major mining economies.
Exploration of Iron ore Mines in India is mostly restricted
to a depth of 50100 m versus as deep as 300 m in countries such as Australia. This is a main driver for lowest
amount spent on exploration in India.

113

It is compulsory to develop geo-scientific partnerships

with the state government, industry and other stake holders
for the management of mineral resources and development
of mineral based industries. Investment in baseline data is
critical as it stimulates the exploration spend and leads to
discovery of new iron ore deposits.
3.11 Long Periods in Getting Mine Lease
and Permissions
It takes 58 years (or more) to get a mining lease in India
(it takes about a year in Australia)India ranks very low in
the Fraser Survey 2011 on both policy and mineral
potential. Applying best practice technology in exploration,
mining and mineral processing is a challenge in Indiafor
instance it can take up to 6 months to get permission for
airborne surveys in India, whereas in Australia and Canada
it takes less than a month.
3.12 The Guerrilla Warfare in the Mining Fringe
Areas
Sensitive law and order problems cropping up during
exploration as well as mining need to be handled jointly
by the mining industry, Ministry of Steel (MoS) and
local administration of the concerned State Government.
The Miscreant armed insurrection sees the mining area
first of all as an economic power-base of the enemy,
less as a territory of class struggle. They blow up railtracks in the impoverished fringes, hoping to put pressure on the government and mining capital. One example
of the fact: On 8th of February 2011 Miscreants [6] blew
up train tracks in three places in the Dhanbad railway
division disrupting traffic for hours. The traffic on the
important Coal India Chord (CIC) remained disrupted
from 2 a. m. to 10.30 a.m. till the tracks were restored.
On 5th of March Miscreants attacked police posts in
nearby Balumath, killing two. They subsequently blew
up rail-tracks. On 3rd of May 2011 eleven policemen
were killed and at least 20 injured when miscreants
ambushed a police team in Lohardaga district of Jharkhand. On 21st of May 2011 a 48-h strike called by the
Miscreants evoked mixed response. The strike hardly
had any impact in urban areas, including Jamshedpur.
The strike affected mainly shops and transport companies in the miscreants affected rural areas. On 5th of
June the Times of India reported: Hundreds of landless
villagers have taken control of 210 bighas vested land in
Khanpur village of Murarai on the Jharkhand border.
Men armed with axes, scythes and sticks stood guard as
their comrades plowed the land with tractors and sowed
paddy seeds

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3.13 Improving the Operational Parameters

Improvement of efficiency parameters like productivity
(output per Man shift- OMS), capacity utilisation and
overburden removal are at very low level as compared to
Australia. The productivity (OMS) of NMDC, which is a
single largest Iron ore producer in India is 33.41 Tonnes
[13]. Capacity utilisation of Iron ore mines is less and
around 8085 % in India where as the global capacity
utilisation ranges from 54 to 98 % depending on the price
of Iron ore [14]. For iron ore mines, the stripping ratio
ranges around 22.5. This means that for every tonne of
iron ore produced, double the quantity of waste is generated. In 20032004 itself, SAIL generated 4.76 million
tonnes of overburden and rejects from its 12 mines in the
country [15].
3.14 Completing the New Green Field Projects
in Scheduled Time
Majority of Iron ore Mines (both green field and brown
field) in India are affected by time overruns. These overruns
vary from a few months to as high as 5 or more years,
placing the project viability at risk. Survey respondents has
identified the bottlenecks which affect their projects and the
challenges they face in conquering them. These bottlenecks,
as enlisted below, are divided into two phases(i) pre-execution phase and (ii) execution and closing phase.
In order to curtail the cost of the project and to increase
the production, the proposed projects has to be completed
within the scheduled time. Completing the project as per
the schedule is a big challenge for the Iron ore producers.
3.15 Management of Water and Tailings
Water is essential for most mineral processing operations.
It is used across the board in mineral processing plants that
employ wet separation processes (gravitational, magnetic,
flotation, flocculation, spherical agglomeration, leaching,
and so forth). Moreover, modern processing plants
increasingly require high quality water and water/ore ratios
ranging from 0.4 to 20 m3/t [11]. Its availability is a basic
requirement in mineral processing, and it is a critical factor
for the decision on where to set up the processing plant.
Reliable and adequate supply of water, as well as its
storage and transportation, are critical for mineral
processing.
In most mineral processing plants, water is recovered in
filters, thickeners or tailing ponds and is reused to minimize operating costs, reduce the amount of effluents
released into the environment and in some cases, recover
reagents. Reusing water significantly reduces the need for
fresh water in the plant and it minimizes catchment costs.

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Trans Indian Inst Met (2016) 69(1):107115

Water usage in mining operations involves significant figures. As far as flotation is concerned, one has to bear in
mind that the total water used comes to 85 % of the amount
of ore pulp/water ratio. In the flotation of iron ore at
Samarco, for example, about 3.80 m3 of water per ton of
ore are used, and 6.0 m3 of water is used per ton of ore
produced; only 6 % is fresh water, the remainder being
recirculated water. This is a big challenge for iron ore
producers.
The management of the residues generated at mining
operations, the tailings and waste-rock, typically presents
an undesired financial burden on operators. Typically the
mine and the mineral processing plants are designed to
extract as much marketable product(s) as possible. The
residue and overall environmental management is then
designed as a consequence of the applied process steps.
Tailings and waste-rock management facilities vary
vastly in size, e.g. from swimming-pool sized tailings
ponds to ponds of over 1000 hectares and from small
tailings or waste-rock piles to waste-rock areas of several
hundred hectares or tailings heaps over 200 m high. Storing of tailings is hazardous and requires lot of space. This
will always be accompanied by threat of failing of tailing
dams.

4 Conclusion
India has emerged as the fourth largest miner and the third
largest exporter of iron ore. India has to definitely
strengthen its position as a major iron ore producer. With a
number of steel projects coming on stream in the next few
year, a steep increase in internal demand for iron ore is
anticipated as per the National Steel Policy. India needs to
invest in infrastructure in order to develop the Iron ore
industry in a long term perspective. Indian iron ore miners
face high political risks, uncertainty regarding future policy
direction which affects capital flows, efficiency and productivity. On logistical ground, rail movement and poor
port facilities poses serious scale-up challenges. Agreeing
on the need to develop infrastructure, policy changes are
needed in iron ore export so as to make it more competitive. There is a need of rationalization of railway freight.
Besides, facilities like rakes, good roads and ports capable
of berthing large size vessels are urgently needed. If the
above discussed challenges are faced positively, challenges
will become opportunities and expected growth rate and
planned Iron ore production can be achieved.
Acknowledgments The authors sincerely thank Shri Narendra
Kothari, Chairman cum Managing Director, NMDC Limited and Shri
Narendra Kumar Nanda, Director (Technical), NMDC Limited for
encouraging and approving to submit this paper.

Trans Indian Inst Met (2016) 69(1):107115

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