The foundations of India’s emergence as one of the world’s leading minerals producing nations were laid in the 1830s, when the East India Company first formed a coal committee.

This move was followed by the establishment of committees to discover other natural resources in different parts of the subcontinent.

Minerals exploration received a major boost when the British colonial government established Geological Survey of India (GSI) in 1851, and brought many leading geologists over from England. Seminal work was carried out by British geologists such as DH Williams and Thomas Oldham in those early years.

Indians were trained in geological science through the introduction of courses in geology at the three leading Indian universities of Calcutta, Madras and Mumbai.

British and Indian geologists went on to find iron ore, manganese ore and chromite – and in large amounts.

The first graded Indian officer of GSI was Pramatha Nath Bose (1855-1934), who trained in geology in the UK.

Bose became an adviser to steel businessman Jamsetji Nusserwanji Tata, who was planning to build a mill at Bhilai (now in the state of Chattisgarh), based on the iron ore deposits that had been found in the Dalli Rajhara hills. Bose told Tata that it would make better economic sense to locate the mill closer to Gorumahisani in Odisha, where the geologist had discovered large deposits of high-quality iron ore.

Tata went along with Bose’s advice and shifted the plant to Jamshedpur. The local area was rich in iron ore, coal, manganese ore, chromite and dolomite and this led to Tata Steel’s raw materials division owning enviable quantities of resources, including manganese ore and chromite, principally in Odisha.

As a pioneer in the development of India’s steel industry, Tata Steel played a major role in discovering the large chromite deposits in the Sukinda region of Odisha in 1949.

But, decades before that, Bose had found manganese ore in the Jabalpur and Balaghat districts of Madhya Pradesh, while University of Edinburgh-educated Indian geologist PN Dutta had discovered the ore in Bhandara and the Chindwara valley.

According to recent reports from the Indian Bureau of Mines, India’s manganese ore resources come to 430 million tonnes, including reserves of 142 million tonnes. Odisha alone contains 40% of the resources. The state also contains 93% of the country’s 203 million tonnes of chromite, including reserves of 54 million tonnes.

For these reasons, the hub of India’s ferro-alloys industry lies in Odisha. Leases for the area’s chromite deposits are overwhelmingly held by the state government-owned Odisha Mining Corp (OMC). Ferro-alloys units without mine linkages depend largely on OMC for their supplies of chrome ore. Unfortunately, these private units frequently have cause to complain about OMC’s chromite distribution and pricing policies.

Tata Steel has the second-largest leasehold ownership of chromite deposits in Odisha, followed by other integrated ferro-alloys producers, such as IMFA and FACOR.

“The farsightedness of Tata Steel management led to the constitution of a separate ferro-alloys minerals division (FAMD), with the objective of reinforcing the value chain from mining to beneficiation to production and sale of ferro-alloys across the globe,” Anirban Dasgupta, analyst with broking house CD Equisearch, said.

“Tata’s FAMD, the world’s sixth-largest producer of high carbon ferro-chrome, is in the process of adding 55,000 tpy of ferro-chrome and silico-manganese production capacity at Odisha’s Gopalpur and Nayagarh projects by 2014. No doubt, FAMD’s ownership of large deposits of chromite and manganese ore has helped,” he added.

Coinciding with Tata’s half-century of chromite mining at Sukinda, FAMD is progressively switching over from open-cast mining to underground mining in Odisha, and has started to introduce trackless mine technology for this move underground.

However, OMC, IMFA and FACOR have stolen a march over FAMD in underground mining.

“Groups so far have been engaged in extracting high grade ore from shallow deposits by way of open-cast mining. But it is time they put increasing reliance on underground mining to get ore from the earth’s lower depths,” RK Sharma, secretary general of Federation of Indian Mineral Industries, said.

“Globally, underground mining is becoming the practice. As with other minerals in the country, our exploration work involving chromite and manganese ore leaves much to be desired. No wonder huge resources remain to be converted into proven reserves,” he added.

Ferro-alloys production
“The genesis of production of ferro-alloys in India can be traced back to 1917, when IISCO Steel Plant (the erstwhile Bengal Iron & Steel Co) followed by Tata Steel... in 1919 began production of ferro-manganese,” according to a research paper from the joint plant committee of India’s steel ministry.

At that time, the use of high grades of ore, reductants and fluxes compensated for India’s expensively inefficient ferro-alloys smelting technology. The mid-1960s marked a watershed for Indian ferro-alloys, when the government, wanting foreign exchange to finance its imports, decided to award licences to new units on the condition that besides meeting growing domestic requirements they used half their capacity for exports.

The 1980s saw product diversification in ferro-alloys, the assimilation of advanced technologies and the creation of some export-oriented units.

When licences were abolished in 1991-92 as part of the country’s liberalisation programme, conditions for the rapid growth of ferro-alloys capacity in many parts of the country were created.

Most of the units born in the years after liberalisation, however, are without captive mines. They remain largely dependent on supplies of raw materials from government agencies, such as OMC and MOIL.

Indeed, many of the units without captive mines and power plants are left high and dry because only 60% of the country’s 5.15 million-tpy ferro-alloys production capacity is online.

India’s total potential output today is 3.16 million tpy of manganese alloys, 250,000 tpy of ferro-silicon, 1.69 million tpy of chrome alloys, and 5,000 tpy of noble ferro-alloys.

Only the units getting sufficient ore supplies from the likes of Tata Steel are able to keep their heads above water.

India’s Planning Commission wants the country to gradually shift from exporting chrome ore and concentrate to the production of value-added finished ferro-alloys.

No doubt, the rising cost of power in South Africa and China has improved the competitiveness of Indian producers.

The country’s ferro-alloys units argue that if the government wants to raise capacity utilisation and achieve higher exports, then it will have to provide access to chromite and manganese ore deposits to the producers via auctions. At the same time, they argue, exploration needs to be given a major push.


Kunal Bose 
editorial@metalbulletinasia.com