KOLKATA (miningweekly.com) – Indian steel production will be hit by an acute shortage of manganese and chrome ore and the demand/supply imbalance will create unemployment over a long period, the Federation of Indian Mineral Industries (FIMI) has warned.

“Seven working manganese mines and four working chromite mines are going to shut down in a few months, by March 31, 2020 leading to wiping out almost 16% manganese ore production in the country and 50% chromite production, thus disrupting raw material supplies for ferroalloys and steel industry creating long term unemployment,” FIMI president Sunil Duggal said.

“The ferroalloy industry is being squeezed by weak demand, high power costs and cut-throat competition in international market and stagnation of steel demand and production in the country,” Duggal said.

“Despite a total production capacity of 5.15-million tons a year by the ferroalloy industry, it has been battling a slowdown since 2013 with actual production of ferrochrome stagnant at one-million tons a year, ferromanganese at 0.52-million tons a year and ferrosilicon at 0.09-million tons a year,” he said.

According to FIMI, despite India’s huge resources of manganese ore, estimated at 496-million tons, and chrome ore of about 344-million tons, the country is still importing these critical steelmaking mineral inputs.

Despite such large domestic resources, manganese ore production has been hovering at 2.4-million tons a year of manganese, 2.7-million to 3.5-million tons a year of chrome ore over the past four years and the gap in demand/supply increasingly being met through imports and leading to significant stockpiles of low grade ore at the pitheads, FIMI said.

The country at the same time does not have sufficient beneficiation capacity for adding value of low grade ore for use by domestic steel mills, it added.

India has set big targets for infrastructure building and domestic manufacturing, which included setting a domestic steelmaking capacity of 300-million tons a year by 2030, which would require increasing present capacity by 2.11 times over the next 11 years.

Such domestic steelmaking capacity would require 11-million tons a year of manganese ore and five-million tons a year of chrome ore. This, Duggal said, could only be achieved if miners of manganese and chrome ore gear up and dramatically enhance output by 2030 of the targeted domestic steelmaking capacity was to be achieved.

He urged the government to frame, “progressive policies for the ferroalloy industry and offer fiscal incentive to producers to battle cheaper imports”.