Here is a term paper on iron ore-economics.
Term Paper on Iron Ore-Economics
Term Paper Contents:
- Term Paper on the Introduction to Iron Ore-Economics
- Term Paper on the Commercial Classification of Iron Ore-Economics
- Term Paper on Iron Ore Fines
- Term Paper on the Reserves and Resources of Iron Ore-Economics
- Term Paper on the UNFC Code on Iron Ore-Economics
- Term Paper on the Facts and Fallacy of Iron Ore-Economics
Term Paper # 1. Introduction to Iron-Ore Economics:
The prospect of the iron ore availability with the projected growth of steel capacity in India is a matter which needs attention.
ADVERTISEMENTS:
There are two divergent views:
(a) One group led by the mines owners, public and private; and SMEs, advocating for abundance availability of high grade iron ore resources in the country,
(b) While the user groups are voicing their concern on the non-availability of desired quality and quantity of iron ore on a sustained basis until further systematic exploration is undertaken to augment “Resources” under “Proved Reserve Base”.
The mining group advocate that India is endowed with huge resource base of 25.22 billion tonnes of iron ore, hematite and magnetite combined together; ‘Reserves (UNFC basis 111, 121,122)’ being at 7.06 billion ton and ‘Remaining resources (UNFC basis 211,222,331,332,333 and 334)’ at 18.16 billion tonnes.
ADVERTISEMENTS:
Of the total reserve base of 7.06 billion tonnes, hematite accounts for 7.0 billion tonnes and magnetite at 0.60 billion tonnes. For a number of reasons, all the reserves may not be accessible to the mining companies and/or SMEs, particularly to those deposits which are occurring in reserve forests, national parks, sanctuaries and ecologically fragile areas like Western Ghat, Kudremukh. This synthesis is based on Ghosh, 2006a, b, 2008 and Ghosh et al, 1996, 2000.
Indian Production and Comparison between trends of Steel Industry:
There has been a remarkable change in global steel scenario between 2003 and 2007, when the crude steel production reached one billion ton level in 2004 and maintained the same level of production from 2005 onwards.
China is the main driver for such phenomenal growth, registering a significant CAGR at a level of 27.5 per cent between 2003 and 2007. The crude steel production in China was at a level of 184 million ton in 2003 which reached a level of 487 million ton in 2007 (as shown in Figure 9.1).
In India, the crude steel production also demonstrated a robust growth, Cumulative Annual Growth Rate (CAGR) being at a level of 9.50 per cent, next to China but, higher than global average growth at 9.30 per cent between 2003 and 2007. In 2003, the crude production was at 33.6 million ton, which reached to a level 53 million ton in 2007.
The Indian steel industry for the last two decades of control regulation registered a very poor growth. However, the deregulation of the Indian steel industry was initiated in 1992. The 10th and 11th Five year plans have shown a significant growth of the steel industry with Cumulative Annual Growth Rate (CAGR) at 9.5 per cent. The performance of the steel industry during 1992-93 to 2006-07 covering three 5 year plans, namely 8th, 9th and 10th have been shown in Figure 9.2.
It will be observed from the Figure 9.2 that immediately after the deregulation, remarkable growth has been achieved at CAGR of 9.7 percent during 8th Five Year Plan. In 9th Five year plan, the slow down to 6.20 per cent, which was subsequently, picked up a high of 9.5 per cent in 10th and 11th Five Year Plan.
ADVERTISEMENTS:
The future projection of steel capacity as reported in the working paper 207 of Indian Council for Research on International Economic Relation (ICRER), 2008 has been presented in Figure 9.3.
Selection of the oxide feed mostly depends on the physical and chemical characteristics of the ore. Depending on the process technology, the oxide feed utilized either as sized ore, agglomerates or fines. However, all the processes aim at achieving an oxide feed with high Fe content, minimum gangue materials and low impurities like sulphur and phosphorous. The other important factor that governs raw material quality is a consistency in chemical composition, granulometry and physical properties.
ADVERTISEMENTS:
For iron making through blast furnace route sized iron ore preferably between 10 mm and 40 mm is charged directly and iron ore fines and concentrates after agglomeration as sinter/pellet. The sized ore should be of high grade, Fe content preferably above 62 per cent with good reducibility and low decrepitation. The ore fines should preferably have 60 percent Fe minimum with low alumina, to yield about 2 per cent alumina in sinter. The lower the alumina content, the better will be RDI of the sinter.
Experience at Tata Steel has shown that reduction of Alumina from 3.1 to 2.1 percent in sinter improves RDI in sinter by about 6 points, which in turn reduces the consumption of BF coke by about 20-24 kg/thm and increases the blast furnace productivity by about 0.1 ton/m3/day. The use of pellets is not practiced in India for economic reason.
Term Paper # 2. Commercial Classification of Iron Ore-Economics:
The Indian iron ore can broadly be classified as hard massive ore, hard laminated ore (HLO), soft laminated (Shown in Figure 9.4).
Term Paper # 3. Iron Ore Fines:
It is widely recognized that agglomerates like sinter/pellets would be better feed in blast furnace provided the sinter chemistry and physical properties are maintained at a satisfactory level.
However, sinter chemistry will largely depend on the chemical compositions of the iron ore fines together with the thermal conditions of sinter blend which will play an important role in determining the primary melt, formed during sintering, and consequently the sinter structure and quality.
The limited incidences of the high grade lump ore in our deposits, ranging between 25 to 35 per cent and the fast depletion of high grade lump ore left no options to the steel plants other than to use iron ore fines through sinter route.
The typical analysis of iron ore sinter feed is presented below in Table 9.1:
It will be observed from the above table, alumina content in the sinter fines traded in the international market varies between 0.94 and 1.5 per cent. It is observed that Al2O3 content in sinter is linearly related with sinter productivity (ton/m2/day).
Term Paper # 4. Reserves and Resources of Iron Ore-Economics:
The reserves and resources estimated by Indian Bureau of Mines (IBM) in different period have been presented in Table 9.2.
It will be observed from the Table 9.2 that total resource estimated at 17.56 billion tonnes on 01.01.1980 was increased to 25.22 billion tonnes in 2005. The Reserves and Resources between 1980 and 2005 have been presented in Figure 9.5.
It is interesting to observe that the total resources of hematite between 1980 and 2005 are steadily increasing while that of magnetite remains more or less steady.
Also from Table 9.2, it will be observed that proved reserves remains more or less steady between 2004 and 2005 while the probable reserves (121,122) increased by 28 per cent and remaining reserves by 14 per cent which contributed jointly in increasing the total resources from a level of 22.0 billion tonnes to 25.0 billion tonnes.
It is pertinent to point out that no systematic detailed explorations have been carried out after 1990 by the major exploration agencies like GSI. Of late, GSI have initiated some exploration.
Term Paper # 5. UNFC Code on Iron Ore-Economics:
The UNFC classifications code for mineral evaluation is guided by three major dynamic axes where each of the axes has further been subdivided into active subgroups, exception being the geological axis.
In three digits code based system, Economic viability axis representing the first digit, the feasibility axis the second digit and the geological axis the third digit. Each of the axes, have three sub-codes, 1 2 3 in decreasing order.
Thus, the highest category of resources under UNFC system will have the code (111) and the lowest category of code will be (334). Now, each of the subgroups is guided by the specific sets of activities and coding is strictly to be made on evaluation of degree and intensity and achievements against each of the activities.
Exploration is one the major activities in evaluating the mineral Reserves and Resources.
UNFC guide line on exploration on iron ore comprises:
1. Topographical survey and mapping in 1:1000 scale
2. Geological study comprising structural and lithological mapping, structural analysis, control of mineralization, ore body configuration, ore body-host rock relation
3. Trenching, pitting and sampling
4. Drilling at closer intervals, say 100mX 50m
5. Characterisation of deposit through detailed petro-mineralogical studies and laboratory testing
6. Geostatistical data analysis and ore body modeling
Mineral reserve has been defined by UNFC under two heads, namely “Proved Mineral Reserves (111)” and “Probable Mineral Reserves (121) and 122).” The “Remaining Resources” is equivalent to “Possible Reserves”.
For implementing any mining project where huge financial liabilities are involved, the prime consideration will be the availability of “Proved Reserves” in the prospect. The “Probable Reserves” needs to be upgraded to Proved Category.
Term Paper # 6. Facts and Fallacy of Iron Ore-Economics:
The mine operators; private and public, along with SMEs and FIMI came heavily on steel mills’ concerns on the future availability of iron ore to support the enhanced steel production capacity in the country. Indian Council for Research on International Economic Relation (ICRER) also expressed similar view on the abundance of iron ore reserves.
They have agreed that estimated resources can easily be enhanced, even without undertaking serious exploration campaign by:
a. Reducing the cut-off grade from a level of 55 per cent Fe to 45 per cent Fe
b. Increasing the depth continuity of the ore body
c. Carry out exploration for proving resources.
It is worth mentioning that cut off grades for iron ore deposits are based on certain technological requirements and economic considerations. Of the estimated reserves, even with present Fe cutoff grade, only a limited part of the same will meet the desired quality specification for iron making.
Also, the iron ore deposit in India is controlled by complex and multiple structural elements. This will be clearly evident from some of the field photographs of structural features still preserved in Jamda-Koira iron ore belt.
In such a structurally disturbed belt, there is no reason to believe that depth continuity of the ore at a point source will continue over the total prospect. So, before increasing the resource base on consideration cutoff grade reduction and depth continuity; it will be prudent to consider the geology and milieu of ore deposit in totality.
For production of 1 ton of hot metal, the requirement of prepared oxide feed (sized lump ore, sinter, pellets etc.) is usually considered at 1.6/1.5 ton. However, this factor increases with decrease of iron content in the feed.
Thus, to process the excavated rom for producing usable feed for iron making, it will be necessary to consider the losses against excavation, processing, handling & transportation as well as the deposits that are locked in the bench slopes and within the zone required for statutory requirements around the periphery of the mine.
Keeping all these factors in mind, the requirements of rom iron ore for year-wise production of steel has been worked out. With this proved reserve (111) as estimated by IBM in 2005, there will be shortfall of iron ore from 2019, unless systematic explorations with all seriousness are undertaken both in the unexplored and explored areas (Figure 9.6).
IBM adopted UNFC code for reserve estimation. But, following strictly the guidelines stipulated in UNFC for reserve classifications, it is unlikely to adopt the same in the light of quantum of exploration carried out in India. If UNFC reserve code is strictly followed, even our proved reserves as reported by IBM since 1990 will drastically be reduced.
No major financial decision is likely to be taken on “Mineral Reserves” unless the “Probable Mineral Reserves (121,122)” are brought under category of “Proved Mineral Reserves”.
To support the envisaged growth of steel capacity, it will be necessary to undertake the detailed exploration both in explored, partially explored and virgin areas.
The objectives of such exploration will broadly comprise:
Upgrade the probable reserves base to prove category (UNFC classification 111). Bring the entire Resources of hematite to Reserve category. UNFC classification code may be adopted after due consideration of economic and metallurgical vectors. Categories the reserves as per specifications of end users. Undertake systematic exploration over the virgin area to discover newer deposits, which may be followed by systematic detailed exploration.
Finally, our reserve base of high grade iron ore, suited for the iron making, is extremely limited and as such, due considerations are to be given to preserve the reserves for domestic use. However, limited exports can always be affected from the selected sectors.
It will be wise and advisable not to reduce Fe cutoff grade, and/or increase the depth continuity of the iron ore, from an incidence in a point source, to increase the reserves base. Moreover, our reserves of the blue dust are very limited and as such, mixing the blue dust with low grade fines to increase the overall grade of exportable consignment may be restricted. About 25 to 30 per cent of blue dust is now used in sinter feed.