TERMS OF REFERENCE (ToR)environmentclearance.nic.in/writereaddata/Online/... · sms & rolling mill total extent: 24.75 acres proposed expansion to steel melting shop (sms) of 60,000

TTEERRMMSS OOFF RREEFFEERREENNCCEE ((TTooRR))

FFoorr

SSMMSS && RROOLLLLIINNGG MMIILLLL

TTOOTTAALL EEXXTTEENNTT:: 2244..7755 AAccrreess

PPRROOPPOOSSEEDD EEXXPPAANNSSIIOONN ttoo SSTTEEEELL MMEELLTTIINNGG SSHHOOPP ((SSMMSS)) ooff 6600,,000000 mmttppaa aanndd RROOLLLLIINNGG MMIILLLL ooff 11..55 mmttppaa

OOff

MM//ss.. AAGGAARRWWAALL SSPPOONNGGEE && EENNEERRGGYY PPVVTT.. LLTTDD..,,

AATT

KKUUDDHHIITTHHIINNII VVIILLLLAAGGEE,,

BBEELLLLAARRYY TTAALLUUKK aanndd DDIISSTTRRIICCTT,,

KKAARRNNAATTAAKKAA SSTTAATTEE

ENVIRONMENT CONSULTANT

METAMORPHOSISsm Project Consultants Pvt. Ltd. (QCI/NABET Approved EIA Consultant)

BENGALURU, KARNATAKA MAY 2016

Pre-feasibility Report for SMS & Rolling Mill of M/s. Agarwal Sponge & Energy Pvt. Ltd., Bellary

1 Prepared by: METAMORPHOSIS Project Consultants Pvt. Ltd., Bengaluru

1 1

CHAPTER - 1

INTRODUCTION 1.1 The Company

M/s. Agarwal Sponge and Energy Private Limited (ASEPL) was incorporated as a Private Limited company on 25th November 2005. The group also has presence in securities as well as physical trading across countries. Under the chairmanship of Anirudh Prasad Agarwal, the group has successfully diversified into various industrial sectors. ASEPL a part of the group set up in the year 2004 and has its manufacturing unit at Bellary (Kudithini village Karnataka state) with the objective to process, smelt, refines and dress all types the of ores including iron ore etc through the process Sponge Iron Plant capacity of 300 TPD along Power Plant of Capacity 12 MW. Manufacturing is done using the latest coal based direct reduction iron method for production of sponge iron by using non coking coal along with iron ore as well as small quantity of dolomite to produce sponge iron. Obtained Environmental Clearance from Ministry of Environment and Forest, New Delhi dtd. 11th December 2008. ASEPL has consistently tapped new opportunities by improving its productivity by using the best quality of raw materials. The firm has already increased its production capacity of sponge iron and further plans to integrate the plant in order to produce finished steel and power, by setting up power plant of 12 mw to using the waste gases producing electricity. ASEPL foresees supplying the best quality finished steel as well as power at a minimum price to its customers. It plans to complete integrate sponge iron plant with induction furnace and re-rolling mill within six months. This enables it to become self-sufficient in all aspect and gain carbon credits.

The prevailing volatile situation of the market for sponge iron and power there is need for going in expansion for the integrated plant in order to the sustainability of the industry, there is revenue generation and increase in employment for the benefit of the local people.



2 2

Anirudh prasad Agarwal : Chairman Sathishchandra Agarwal : Director Murarilal Agarwal : Director

1.1.1 Shri. Anirudh prasad Agarwal, Chairman - Aged 83 years is the Chairman and Managing Director of the Company. He has rich experience of over 5 decades in the edible oil Industry. He is charged with overall responsibility and supervision of the group companies i.e., Agarwal Industries Private Ltd engaged in refining and sale of edible oils, Bhagawati Fats and Edible oils Pvt Ltd engaged also in vegetable oil business, in addition to Agarwal Sponge & Energy Pvt. Ltd. Engaged in Sponge Iron & Power Generation.

1.1.2 Shri. Satish Kumar Agarwal, Vice Chairman - Aged 58 years is the Vice Chairman of the company and has been handling the market and purchase portfolio of the Group.

1.1.3 Shri. Murarilal Agarwal, Executive Director - Aged 56 years is the Executive

Director of the company. He has been handling the entire production and project implementation activities of the Group.

Presently, ASEPL propose to expand by adding the Steel Melting Shop (SMS) of capacity 60,000 mtpa and Rolling Mill of capacity 1.5 mtpa within the exiting premises.

Company’s unique selling points are:

Centralized location – huge advantage Quality Products Established network of marketing Advisory committee comprised of renowned steel technocrats / bankers Professionals

1.2 Strength of Directors

A Team of Entrepreneurs, having ventured into Greenfield Projects and successfully establish and manage the Business Ventures.



3 3

Have come out Champions, sometimes in most difficult situations, having mastered the art of managing Technology & Innovations, Human Resources and Finance, the most critical factors in any successful Venture

Having In-Depth Knowledge of the Steel Sector, well placed to ascertain Requirements, Benefits as well as Pitfalls of the Industry.

In-House Financial Strength, either through their Own Financial Strength or Internal Borrowings from Relatives or Friends, enabling to take quick and unanimous decisions at critical junctions.

1.3 Proposed Project

The company proposes to install rolling mill and SMS to the existing sponge iron and power plant at Kudithini Village, Bellary Taluk and District, Karnataka. Latitude 15°12ʹ N and Longitude 76°46ʹ E. The estimated cost of the project is Rs. 2200 Lakhs.

Fig 1.1: Location of the Project



4 4

The manufacturing capacity of the proposed expansion Project is given in Table – 1.

Table 1: Proposed Manufacturing Facilities

Sl. Particulars Capacity

1 SMS 60, 000 mtpa 2 Rolling Mill 1.5 mtpa

M/s. Agarwal Sponge and Energy Pvt Ltd., has engaged the services of the METAMORPHOSIS Project Consultants Pvt. Ltd., Bengaluru for preparing the Environmental Impact Assessment (EIA) & Environmental Management Plan (EMP) for the proposed project.

1.4 Objective

The company proposes to install rolling mill and SMS to the existing sponge iron and power plant at Kudithini Village, Bellary Taluk and District, Karnataka state with the following objectives:

Table 2: Objectives of the Project

Particulars Application

Steel Melt Shop (SMS)

To produce steel billets to meet the requirements of proposed rolling mill. Further it will consume Sponge Iron produced in the proposed DRI division/Tunnel Kiln/RHF.

Rolling Mill (TMT) For rolling of Steel Billets/Blooms produced in proposed SMS division and convert them into rolled products like TMT , angle, channels, beams etc.



5 5

CHAPTER – 2

MARKET PERSPECTIVE 2.1 Steel Industry in India

Indian Economy is growing at a fast rate. According to a World Bank Statistics and outlooks, Indian Economy is expected to grow at a faster rate than of China. Projected Growth of 2012 in India is 8.7% compared to China’s 8.4%

However we must also remember that Chian is a US$ 5.5 Trillion Economy, while India is only at US$ 1.3 Trillion.

Positive trend is India’s Per Capita Steel Consumption, a primary Index of development for any country, is growing much faster, increasing from 31.3 kgs in 2003 to nearly 60 Kgs in 2010

However this is still much lower than even other developing countries, 250 Kgs in China, 100 kgs in Brazil and a global average of 198 kg.

Steel demand in India is expected to rise sharply, projected at 8 – 10% percent annually until 2019-20.

India’s contribution to World Steel Production has risen sharply, hovering around 3% till 2006/07, to nearly 5% in 2011.

Producer Production % Age

Change 2009-10 2010-11 Primary Producers (SAIL/RINL/TATA)

23,277 23,852 2.47%

Secondary Majors (JSW/JSPL/ISPAT/ESSAR)

13,381 13,870 3.65%

Other Producers 29,181 31,853 9.16% Total 65,839 69,575 5.67%

With a production of 69.5 Million Tons in 2011, India is the 3rd largest producer of Steel in the World today

Till last century crude steel production was largely confined to the Primary Steel Sector with only a few Major Producers. However today crude steel production in the Secondary Sector has gone up considerably



6 6

From the statistics in the previous page it is also apparent that in 2011

contribution of Secondary Sector to Crude Steel Production went up to more than 50%.

It is evident that today the Drivers of Growth in the Steel Sector in India are in the Secondary Sector

With constant emphasis of the Government to keep the Growth Momentum going it can be assured that more emphasis will be given towards growth of the Steel Sector in India

Efforts of the Government towards stream-lining this Sector are evident from the focus on policies to ensure value addition of ores extracted in the country, instead of exporting out bulk of good quality ores, reserves of which are scarce, not only in India, but across the World.

Consequently the Govt., both at Centre and States are actively considering, if not ban of Export of Ore, but at least controlling it to a level so that Industries in the Country get priority over the Ore.

2.2 Market Scenario

2.2.1 Steel Sector & Growth Potential

Steel is the basic commodity in all industrial and development activities and per capita consumption of steel is considered as an index of industrial prosperity and growth. Production of Steel

Steel is the material of choice for industrial applications due to its high specific strength and relatively low cost per unit weight. Present per capita steel consumption in India is around 55 kg as compared with an average 150 kg across the globe and 250 kg in China. Global steel production surged 7.4 percent in Novembers 2011, The total steel production for the first 11 months of 2011 rose to 1374.53 MT and with this trend it is likely to cross 1500 MT for the year 2011 as compared to 1415.715 MT for the year 2010 highest in the history of Mankind.(Source: World Steel Association).



7 7

The 66 countries belonging to the trade body saw production reach 124 million metric tons in November 2011, up from 115.5 million in November 2010 as the world economy was just beginning to emerge from crisis. India produced 68.3 MT of steel in 2010 compared to 63.5 MT in the year 2009. The production for the 11 months of 2100 was around 66.03 MT compared to 62 MT for the corresponding period in 2010. The steel industry in India has been moving from strength to strength and according to the Annual Report 2010-11 by the Ministry of Steel, India has emerged as the fourth largest producer of steel in the world and is likely to become the second largest producer of crude steel by 2015-16. Steel production rose 4.2 per cent to reach 60 MT in the fiscal year 2009-2010, according to the Ministry of Steel. Steel production in the fiscal year 2011-12 fiscal year is likely to be 75 million tonnes, compared to 66 million tonnes in the 2010-2011. Domestic Steel Demand Projection Today India is the 4th largest producer of steel with an annual estimated production of around 70.0 million tones in the calendar year 2011. Production growth has been sustained despite global economic meltdown. However, India had become the third largest steel producing country in the world in June 2009.

Figure 3.1



8 8

It is reported that Indian government is concerned over the increasing gap between demand and supply of steel in India, and sees that the situation is going to become worse in next few years. All estimates regarding consumption and production had gone haywire. While consumption was estimated to grow at 3% and production at 7%, it had been seen that consumption growth had outstripped projected demand. The Ministry of Steel has noted that the demand for commodity in India has been rising. This shows that the Indian economy will continue to have enough steel demand. Also, India has remained indifferent to the decline in average per capita steel consumption worldwide. As per the statement of the Steel Secretary Shri Atul Chaturvedi made 03.03.10, steel demand is seen rising by 10 percent in the fiscal year to March 2011, helped by higher spending on infrastructure. He further added that "Steel demand will continue to rise because a lot of emphasis has been put in the budget on infrastructure development," India's steel consumption rose 8 per cent in the year ended March 2010, over the same period a year ago on account of improved demand from sectors like automobile, infrastructure and housing. The country’s steel consumption increased to 56.3 MT in the 12 months in 2010 from 52.3 MT in the previous year, as per the Ministry of Steel in-spite of recessionary trends worldwide. Indian economy is mainly driven by the domestic consumption, and so it has not been affected much by the decelerating global economic growth in comparison to other countries. The steel industry in India has made a commendable bounce back during 2009 -10 on back of rebound in demand from automobile sector, rural infrastructure and housing sector. This upturn in demand is recorded in a period when the leading steel producing countries of the world are witnessing sharp downturn in their output. The government is also mulling integration of the steel plants and mines with the highways development-related programs, particularly rural road schemes for large-scale expansion of delivery chain of steel in the country. The Ministry of Steel is currently conducting a survey based on the recommendation of the Parliamentary Standing Committee to assess and evaluate the demand for the



9 9

commodity in rural areas, with particular reference to several infrastructure development programs such as Bharat Nirman. The Eleventh Five-Year Plan (2007-12) has also emphasized on the importance of usage of steel in the country, especially in the rural areas, that will result in economic growth and development and rising income levels in the household sector. The steel industry is buoyant due to strong growth in demand particularly in the following sectors which are the key drivers to the steel demand. India needs large consumption of steel for the growth of the following infrastructures:

Modernization of air ports Expansion of railway tracks Auto industry Road projects Real estates -Housing and urban development Shipping & Heavy Industries Power Projects Infrastructure development Ferrous & Non-Ferrous projects

Figure 3.2



10 10

A host of steel companies have lined up major investment proposals. Furthermore, with an expanding consumer market, the Indian steel industry is likely to receive huge domestic and foreign investments. As of now, both domestic and foreign steel players have signed 222 memoranda of understanding with states for setting up new units with a total planned capacity of around 243 million tons and a total proposed investment of over Rs 5, 14,000 Crores. Private and public sector steel companies have also embarked on capacity expansion. Steel Authority of India Limited plans to take up its hot metal production to 26.13 million tons by 2010 from the present 12.84 million tons. Private steel majors including Tata, JSPL, Ispat and JSW Steel have also lined up expansion of their existing production strength. IInnddiiaa iiss ppooiisseedd ttoo bbee tthhee eemmeerrggiinngg ppoowweerrhhoouussee ooff ggrroowwtthh.. The proposed capacity addition in Steel sector has been depicted in the figure given below:

Figure 3.3

According to a report by global consultancy firm PricewaterhouseCoopers (PwC), India could become the world’s third largest economy by purchasing power parity (PPP), overtaking Japan in 2012. This would be almost 20 years ahead of Goldman Sachs’ projection of 2032 in its BRIC (Brazil, Russia, India, China) report. India is fast emerging as a global hub and in future FDI is bound to increase by leaps & bounds.



11 11

In view of the growing demand, the government plans to scale up steel production to touch 130 million tons by 2013-14.and over 290 million tones by 2020. By 2015-16, India will emerge as the number two steel producers in the world.

Steel is a basic commodity for all industrial activities. Quantum of its consumption is considered as an index of industrial prosperity of any nation. Since independence, there has been a substantial growth in the steel sector in India. From 1.5 MT in 1950-51, India's steel making capacity in the integrated sector has increased to about 53 MT/yr. at present. In spite of such a growth, the per capita steel consumption in India continues to remain at a low level of around 53 kg only, as compared to 300 to 675 kg in the developed countries and around 180 kg in the Peoples Republic of China. The Indian economy since the beginning of liberalization has been growing at a rate of around 5% on a year to year basis. The ever expanding urban population with its increasing requirements for housing and communication has been creating a perennial demand for investments in infrastructure. As a result, the Government, Corporate, Banks and other institutions have started focusing on infrastructure development as a key area of their activities. This is expected to lead, to a substantial improvement in the per capita consumption of steel. The huge reserves of raw materials and cheap availability of labour notwithstanding India’s contribution to world steel production is only of the order of 2.6%. Moreover, the Government is the biggest spender in infrastructure development. Therefore, entrepreneurs are looking forward to investing in the enhancement of steel making capabilities in order to meet the future demand.

0

200

400

600

800

1000

1200

1400

Countries

Kg

s p

er

Cap

ita



12 12

The Indian iron and steel industry is nearly a century old with Tata Iron & Steel Co (Tata Steel) being established the first integrated steel plant during 1907. since the Post independence, this industry sector has made a steady progress. At present India is the tenth largest producer of steel in the world. In India, a major part of steel is consumed in engineering applications, followed by automobiles and construction. The growth of steel, as is well known, is dependent upon the growth of the economy, industrial production and infrastructure sectors.

Over the last few years the performance of the Indian steel industry has been adversely affected due to overcapacity, cheap imports, economic slowdown, declining global steel prices and also anti dumping duty imposed by USA on Indian exports. Most major steel companies, with the exception of Tata Steel, have thus been reporting losses.

About Our Field

In today's ecologically aware times, STEEL wins hands down over wood and plastic. In earthquakes and bad weather, steel offers safety. Where speed in construction is the key, steel stands tall. Some advantages of steel include strength, energy efficiency, design flexibility, fire resistance, ease and speed of assembly, material cost advantage, less deterioration over time, less maintenance, high quality homes, better resale value, a cleaner work site with less wastage, straight and uniform walls, and eco-friendliness. The consumption of steel has been identified as an indicator of economic well being of a country. It reflects the growth in infrastructure and the maturity of the manufacturing industry of a nation. The present per capita consumption of steel has been stagnating in the range of 43 kg per annum, whereas countries like China have surged ahead. The per capita steel consumption in China is about 180 kg per annum and it produces more 320 million tonnes and imports another 60 million tones. However, steel consumption and production in India is approximately 53 million tonnes. This huge difference points to the need for strenuous efforts to promote steel consumption in our country, particularly in the rural areas where there is a tremendous amount of untapped latent demand.



13 13

2.3 Long products: an overview

Long steel products, comprising bars, rods, structural and rails, are primarily used in sectors such as construction, housing, infrastructure and railways. Longs constitute 45% of steel production in India. Over the last five years, a 4% CAGR has been seen in demand for long products. Consumption in FY2004 has grown relatively faster – at about 5%. Prices of long products have remained firm – in line with the overall rise in steel prices. International prices of wire rods during H1 FY2005 have risen 47%, whereas those of billets have climbed 50%.

Bars and Rod Production in the Country Various studies conducted by reputed agencies with regard to long products in the Weston and Eastern region show that, there is substantial gap between demand and supply of the steel and this would increase as constructional activities gather pace in the next few years. Considering past and present trend of consumption of steel and country's future industrial and economic planning the demand of finished steel as projected by working Group of Iron & Steel for 8th five year plan and the task force constituted by Government of India is 42.0 million tons for 2006-07 and 57.0 million tons for 2011-12. Out of this the demand for bars and rods for 2011-12 is 15.23 million tons and 21.13 million tons respectively. Subsequent to above projection working group on Iron & Steel for 9th Five Year Plan has projected the demand for 2005-06 at 48.8 million tons. While estimating the demand for bars/rounds during this period it has been assumed that percentage contribution of demand of this product out of total steel demand as projected by Working Group for 8th Five Year Plan shall be similar for the 9th Five Year Plan also.



14 14

Thus the demand for bars and rods is projected for the 2006-07 is 17.7 million tons. It has been estimated against the demand there will be a shortfall of 9.9 million tons. If however an average 5% growth of production per year is considered from 2002-03 by way of expansion/better utilization of existing units the shortfall of bars/ rounds would be 8.2 million tons in 2006-07. With the increase in constructional activities in various sectors like irrigation, dam, power plants, housing etc. the demand for rolled deformed bar in the form of TMT bar and cold twisted deformed bars are increasingly rapidly. A comparative study of demand – past and future of Long Products and steel structural in India is given below.

Steel being the basic raw material for the construction industry, the capital goods and engineering goods industry, as also the auto sector and white goods sector, its growth is dependent upon the demand by these segments of the industry. In the last few years several big infrastructure projects have been announced by the Government. New projects in the oil sector, power sector, fertilizer sector, where intensity of steel consumption is high, have also come up in the recent past. 2.4 Scenario of Agarwal Sponge and Energy Pvt. Ltd.

The company has already implemented the Sponge Iron and recently selling its product, which is very much in demand as the steel industry mainly to Furnaces etc. as steel demand is increasing due to massive growth in the Infrastructural and Real Estate segments. The promoters are experienced in Steel Line and there will not be a problem for market of rolling products.



15 15

2.4.1 Swot Analysis

Strength

Strong Promoters: The promoters of ASEPL have been in the business of Iron & Steel & its related Products in the last few years and have played great role in establishment of various sponge iron and steel units. The company has a very strong management team with expertise and acumen in the steel related trade & products. With the proposed expansion of its operation, (backward integration) to have a integrated steel unit, with Sponge Iron, Captive Power, Furnace and Rolling Mill would really help to increase the profitability of the company. Low Operational Costs – The Company's main advantage is the proximity to the Market for selling its finished product. The cost of Power to the Company will be lower than the same applicable to other similar units, which do not have captive generation plants. This enables the company to have its cost of production at much lower level than that of comparative units located elsewhere. Captive Business Model: The proposed project is a step forward towards higher degree of integration. Sponge Iron production shall be consumed by the proposed Melting Shop, hot flue gases from Sponge Iron plant shall fire captive power plant and energy produced by C.P. Plant shall be consumed by induction furnaces / rolling mill of the company. After completion of the project such type of integration shall give significant competitive edge to the company. Technology selected by the promoter is an established one, suitable for Indian conditions. Weakness Most of the input costs like coal/iron ore are controlled by Govt./Govt. Agencies. Any Adverse change in Government policies on the above inputs will adversely affect the input cost. Opportunities Increase in Global demand - Steel is the backbone of every industrial economy. The potential demand for steel depends on the state and pace of development of an economy. In this regard development of India has been gathering momentum over the years. The Demand for Mild Steel Ingots is increasing with revival in Indian



16 16

economy. Going forward, the demand is likely to sustain in near future also on the back of continuing demand from countries like China and improving growth prospects of US and Japan. Increase in Domestic Demand - The per capita steel consumption in India is abysmally low at around 43 kgs as compared to 180 kgs of China and over 400 kgs in the developed countries. This wide gap in relative steel consumption indicates that the potential ahead for India to raise its steel consumption is high. A robust housing and infrastructure sector, with growth potential in the auto and the consumer durables sectors is likely to be a big positive for the domestic steel sector. It is significant to note that, an average GDP growth rate of at least 7% per annum looks quite possible over the next ten years. Cost Advantage of Indian Manufactures - Indian steel producers are one of the lowest cost producers in the world, which provides them a hedge against fall in prices. Further, relatively efficient and vertically integrated companies are likely to be in a better position to weather any steel downturn. Almost all the sponge iron production will be earmarked for captive consumed. Thus company will be making value addition so as to improve its profitability. Company may further enhance its captive consumption on the strength of favorable demand & supply position. The current upturn in steel industry will provide substantial opportunities to the company for improving its operational performance. Threats The sponge iron industry may be heading for an oversupply situation. The rampant growth in small-sized capacities in eastern India may outpace the growth in demand, resulting in a sharp drop in the operating rates of the industry and sponge iron prices in the domestic market. Fluctuation in the Steel Price may effect the operations of the company however due to strong captive model of the company mitigate this.



17 17

2.5 About Karnataka

The Karnataka is also the Knowledge Hub of the nation – it has the highest number of medical colleges and third highest number of engineering colleges in the country. The State is the pioneer in two cutting edge industries, aerospace and biotech, where it is the global face for India. The Bangalore has become to cost effective and quality solutions in numerous industries. While at the beginning, this represented off-shoring of low-end services in the BPO sector, the latent strengths of the State have now made it the first stop destination for high-technology cutting edge research and manufacturing centres of global majors. Bangalore is the world’s fourth largest technology cluster as it has the perfect ecosystem fostering growth and development of State-of-the-art technology.

The State economy has a sound base in its rich resources, manufacturing expertise and proactive government policies that have kept growth going in tough times. Agriculture sustains around 63 % of the population and the State accounts for 6% of all food grains production in India and 14% of India’s groundnut output. The State government is encouraging horticulture and Agro-processing to utilize the full potential of resources. Karnataka is one of the country’s largest producers of fruits and vegetables, it produces 12% of fruits and 8% of vegetables grown in India. The State ranks second in the production of flowers, it has in fact the largest area in the country under horticulture. Karnataka ranks second in area and third in production of plantation crops. The state of Karnataka contributes 70% of India’s coffee production and is also the largest producer of spices, aromatic and medicinal crops. The State is the second largest producer of tobacco in the country and the third largest producer of sugar in the country, contributing 5.22% to India’s sugarcane output. It contributes 6% of the total cotton produced in the country, 65% of India’s raw silk and 12 % of India’s wool production, making the State a leading centre for the textile and garment industry. First State to bring the private sector into higher education, Karnataka has the highest number of medical colleges in the country. The State is one of the main centres for medical tourism in the country, as its super specialty hospitals draw in patients from abroad. Always on the forefront of innovation, the State is the biotechnology hub of the country, home to 187 out of India’s 340 biotech firms, and is leading in nanotechnology research. Currently ranking fourth in tourist



18 18

destinations in India, the State is set to become the leading destination for tourists, in fact the State policy aims to make Karnataka the single largest sector in the economy by 2014. One of the top five industrialized States of India, Karnataka is emerging as an undisputed investment destination for investors. Available opportunities and subsequent benefits along with the investor-friendly policy of the Government make the state an ideal location for the business and residence.

Major Strengths

Good infrastructure development with readily available land, power and water.

Highly-skilled technical manpower base, with large number of engineering / technical institutions and centers of excellence.

A host of reputed multinational industrial & research organization. Technology – savvy work force with proficiency in English language. Conducive environment, salubrious climate, cultural diversity and

cosmopolitan lifestyle. Excellent healthcare facilities, connectivity, effective law and order and

cordial industrial relation. Fast growing markets and organized retail network with emphasis on new

economy sectors. Investor-friendly governance combined with excellent logistics support and

effective-governance.

Industrial investments - Driving growth

Robust infrastructure initiatives and efforts from the concerted authorities have ensured that Karnataka remains top on the priority list of the investors,

Consistently ahead in attracting Foreign Direct Investments (FDI). Ranked 3rd with a share of 10.11% of total FDI inflow to the country during 1997 to April 2008.

3,215 Industrial Entrepreneur Memorandums issued to establish large & medium industries in the state between 1991 and February 2009.



19 19

2.5.1 Karnataka Industrial Policy 2009-14

Introduction

Karnataka is one amongst the industrially developed States in the Country. The State has potential to stand out on the fore front and has been focusing on development of industries, trade and service sectors.

The State Government understands that the challenges posed due to global economic recession have to be addressed to promote economic growth of the State. A stimulus to boost economic activities needs to be given to sustain the current pace of overall development. Further, the state is endowed with rich natural resources across the State and such resources need to be optimally utilized for the benefit of local people. Value addition to resources is one of the efficient ways of optimizing the locally available wealth. This will also help to ensure uniform spread of industries and economic activities throughout the state and will accelerate the pace of development especially in the district of North Karnataka. Through these measures, the Government would be able to readdress the serious issue of regional imbalances in development.

The state government realizes the limitation of agriculture sector to generate large scale employment to the local youths. About 56% of the state’s workforce is estimated to contribute 19.13% of the GSDP. It is agreed that, the implementing sector has high potential to create maximum employment that too, to all sections and level of the aspirants. In order to provide suitable environment for investors, the state government has already enacted Karnataka Industries (Facilities) Act, 2002. Due to the progressive measure and pro-active mind set of the government, today, the Karnataka has been recognized as one of the preferred investment destination both for domestic and overseas investors.

The state government has introduced Industrial Policy 2006-11 with an aim to increase the growth of GDP, strengthen manufacturing industries, increase share of exports from Karnataka, to generate additional employment of at least 10 lakh persons in the manufacturing and service sectors, reduce regional imbalance and ultimately aim at overall socio-economic development of the state.



20 20

In the meantime, the Government of India enacted Micro, Small and Medium Enterprises Development Act, 2006 and requested all the States to provide required support and encouragement to make MSMEs more competitive. In order to make the state more attractive and investors friendly, there was a need to focus more on inclusive industrial development, comprehensive HRD programmes, special attention towards development of sector specific zones, classification of Taluk’s according to Mr. D M Nanjundappa Committee Report, attractive package of incentives and concessions, encouragement for existing industries to take up expansion, modernization and diversification etc..

The state also understands the need to provide stimulus measures for industries to combat the prevailing financial crisis. Keeping these points in view, the state intends to formulate a new Industrial Policy with a determination to provide required platform for all the investors.

This policy is framed with the broad guiding principles of creation of employment development of backward regions and value addition to local resources.

Vision

To build prosperous Karnataka through development of human & natural resources in a systematic, scientific and sustainable manner.

Mission

To create enabling environment for the robust industrial growth.

To ensure inclusive industrial development in state.

To provide additional employment for about 5 lakh person by 2018.

To enhance the contribution of manufacturing sector to the state’s

GDP from the current level of 17% to 20% by the end of policy period.

Strategies

Thrust on provision of world-class infrastructural facilities for industries with active participation of private sector/industry.

Development of sector-wise industrial zones for optional utilization of local natural and human resources so as to minimize migration of people to urban centers.



21 21

Simplification of land acquisition procedures with emphasis on inclusive

development. Safeguarding the socio-economic interests of both farmers and investors while

acquisition of land. Preferential treatment for MSME sector enabling to meet the global

Challenges. Attractive employment and performance linked package of incentives and

concessions to attract investments to backward regions and also to provide leverage to MSME sector.

Thrust on development of MSME sector through attractive package of incentives & concessions.

Tailor made package of incentives to larger projects having wider positive implication on the state’s economy to leverage a better edges over other competing states.

Additional incentives for entrepreneurs belonging to under privileged sections of the society to bring them to the main stream in order to achieve much needed inclusive growth.

Focus on skill development in order to enhance the employment ability of youth especially women and also to make ready-to-employ human resource to the industry.

Inculcate entrepreneurial qualities amongst local youth in general and women in particular and motivate them to take up self employment by extending handholding support.

Create level playing environment for all investors/private sector players by enhancing the facilitation mechanism enabling to do their business with ease and less transaction cost.

Appropriate provision for the protection of environment and to encourage energy & water conservation measures in industry / project through go-green strategy.

2.4.2 Mining –vs- Sponge Iron in Bellary

Even though Sponge Iron Plants are designed for high grade, high tumbler index iron ore, expecting input grade of 63% - 65% Fe, in reality the reserve for good grade ore is limited.



22 22

Worldwide ore with Fe content above 62% is estimated to be only around 10% of

total reserves. Even though the proportion in India is higher, it is fast getting depleted

Today sponge iron plants are forced to feed even 58% Fe ore into their kilns, compromising on life of key machinery and quality & price of finished products

There is an enormous price disparity between good grade ores and low grade ores. With huge profit margins in ores presently extracted by mine owners, they are least interested in investing in processing of low grade ores, in spite of pressure from Govt.

2.4.3 State Policy

With above considerations, the recent Govt. Policy stresses on the following areas

Utilization of Iron Ore Fines indigenously, specifically Beneficiation of Low

Grade Ores Maximize Value Addition of Ores in the State, within the State, thus encouraging

max. Investments/ Revenue Generation in Downstream Industries Priority to establishments proposing Industries for Value Addition in the vicinity

of mining areas Last, but not the least, Utilize of Mine Wastes to minimize Environment Impact 2.5 About Karnataka

Karnataka is also the Knowledge Hub of the nation – it has the highest number of medical colleges and third highest number of engineering colleges in the country. The State is the pioneer in two cutting edge industries, aerospace and biotech, where it is the global face for India. Brand Bangalore has come to mean cost effective and quality solutions in numerous industries. While at the beginning, this represented off-shoring of low-end services in the BPO sector, the latent strengths of the State have now made it the first stop destination for high-technology cutting edge research and manufacturing centres of global majors. Bangalore is the world’s fourth largest technology cluster as it has the perfect ecosystem fostering growth and development of State-of-the-art technology.

The State economy has a sound base in its rich resources, manufacturing expertise and proactive government policies that have kept growth going in tough times. Agriculture sustains around 63 % of the population and the State accounts for 6% of



23 23

all food grains production in India and 14% of India’s groundnut output. The State government is encouraging horticulture and Agro-processing to utilize the full potential of resources. Karnataka is one of the country’s largest producers of fruits and vegetables, it produces 12% of fruits and 8% of vegetables grown in India. The State ranks second in the production of flowers, it has in fact the largest area in the country under horticulture. Karnataka ranks second in area and third in production of plantation crops. Karnataka contributes 70% of India’s coffee production and is also the largest producer of spices, aromatic and medicinal crops. The State is the second largest producer of tobacco in the country and the third largest producer of sugar in the country, contributing 5.22% to India’s sugarcane output. It contributes 6% of the total cotton produced in the country, 65% of India’s raw silk and 12 % of India’s wool production, making the State a leading centre for the textile and garment industry. First State to bring the private sector into higher education, Karnataka has the highest number of medical colleges in the country. The State is one of the main centres for medical tourism in the country, as its super specialty hospitals draw in patients from abroad. Always on the forefront of innovation, the State is the biotechnology hub of the country, home to 187 out of India’s 340 biotech firms, and is leading in nanotechnology research. Currently ranking fourth in tourist destinations in India, the State is set to become the leading destination for tourists, in fact the State policy aims to make Karnataka the single largest sector in the economy by 2014. One of the top five industrialized States of India, Karnataka is emerging as an undisputed investment destination for investors. Available opportunities and subsequent benefits along with the investor-friendly policy of the Government make the state an ideal location for the business and residence.

Major Strengths

Good infrastructure readily available land quality power and water Highly-skilled technical manpower base/a large number of engineering/

technical institutions and centers of excellence A host of reputed multinational industrial & research organization Technology – savvy work force with proficiency in English language



24 24

Conducive environment, salubrious climate, cultural diversity and

cosmopolitan lifestyle. Excellent healthcare facilities, connectivity, effective law and order and

cordial industrial relation. Fast growing markets and organized retail network with emphasis on

new economy sectors. Investor-friendly governance combined with excellent logistics support

and effective-governance

Industrial investments driving growth Robust infrastructure initiatives and concerted efforts have ensured that Karnataka remains top on the priority list of the investors

Consistently ahead in attracting Foreign Direct Investments (FDI). Ranked 3rd with a share of 10.11% of total FDI inflow to the country during 1997 to April 2008

3,215 Industrial Entrepreneur Memorandums issued to establish large & medium industries in the state between 1991 and February 2009.



25 25

CHAPTER – 3

SITE SELECTION 3.1 Introduction The ASEPL has already established and operating a Sponge Iron Plant of capacity 300 TPD and Power Plant of Capacity 12 MW (6MW – AFBC and 6 MW – WHRB) at Kudithini Village, Bellary Taluk & District. The important consideration was with respect to location of the plant with respect to the accessibility. The plant location has been so chosen that is close to the main Iron Ore mining areas. It is also close to the main road, broad gauge railway line and nearer to the ports like Goa, Mangalore-Mumbai, so that transportation to various sites of finished products is easy and economical. 3.2 Criteria for Selection The parameters that play a major role in site selection are as follows: 3.2.1 Land Availability The nature of land for core plant must satisfy the following major criteria. Flatness - Preferable flat or gentle natural slope of land to avoid excessive

earthwork. Stability - Geological, Geotechnical stability for economic foundation Flooding Risk - Magnitude of runoff from surrounding areas and risk of flash

flooding to be minimized. Type of land - Preferably non-residential, non-irrigated with no forest land and

minimum of irrigated/cultivated land. Habitations - Area with large population should be away from plant location.

Displacement of habitants should be avoided or minimized. 3.2.2 Infrastructure Requirements Setting up plant requires a number of basic infrastructures, such as,

Availability of land Rail/road accessibility



26 26

Availability of raw materials and proximity to source Availability of water and proximity to source Environmental consideration

3.2.3 Transportation Logistics The plant location has been so chosen that is close to the main road and broad gauge railway line so that transportation to various sites of finished products is easy and economical. 3.3 Salient Features of the Site Chosen at Badami There are many favorable factors, economical and environmental, for the site located at Kudithini Village and falls in the Toposheet No. 57A/12 which is enclosed as Drawing – 1. 3.3.1 Land

M/s. Agarwal Sponge and Energy Pvt. Ltd., has made agreement for purchase of land sufficient for the proposed expansion project. There shall be no resettlement and rehabilitation of population for this project. The land is suitably located against any flooding or inundation even during severe climatic conditions. The total land available at the present plant site is about 24.75 Acres. 3.3.2 Rail/Road Accessibility

The nearest railway station is Bellary Railway Station which is about 15 Km from the site. No problem is envisaged in accessibility and transportation of heavy equipment to site by road or rail. Road connectivity is through Ankola - Guntakal National Highway located at distance of 2 km from the Project Site.



27 27

CHAPTER - 4

DESCRIPTION OF PLANT FACILITIES

4.1 Infrastructural & Off-Site Facilities The proposed expansion of rolling mill and SMS plant to the existing sponge iron and power plant will have the following Infrastructural & Offsite Facilities. 4.1.1 Infrastructural Facilities The major infrastructure facilities required for the proposed expansion of rolling mill and SMS plant to the existing sponge iron and power plant complex are as follows -

Facilities for obtaining required quantity of raw material. Working within the close proximity. Facilities required for Power Supply. Well connected Transportation Facilities. Other ancillary Facilities. Required quantity of Water

4.1.2 Off-site Facilities

Main Ware House Laboratory Maintenance Shop Vehicle Maintenance Shop Administrative Building Technical Building Guest House Canteen Water Facilities First Aid Fire Fighting systems Road Weigh Bridge Car / Scooter Parking Fire Protection system Permanent Storm Water System Sanitary Sewer system



28 28

4.1.3 Water Facilities Iron and steel making is a heat intensive process where in a considerable quantity of cooling water is required for control of metallurgical process as well as for recovery of heat from unutilized heat. The water is not used for industrial process, but for cooling purposes. This also helps to recover the heat losses, which can be used from power generation through steam. In order to conserve fresh water, water economy has been an underlying criterion for selection of plant and equipment.

The water recirculation systems have been planned to cater extensive recycling and

reuse of water from plant processes. The company has opted for Air Cooled Condenser for its proposed expansion Plant, which will minimize the use of fresh water. Water of required quality as obtained from the source will be used in the secondary side of plate heat exchangers for cooling process water in the primary side and also for direct cooling circuits. For the primary side, soft water will be re-circulated in closed circuits. Suitable treatment facilities have been planned for open contaminated circuits to render the return water from the unit reusable. Evaporative cooling towers will be provided for cooling industrial water in open circuit recirculation systems. The requirement of water will be fulfilled by the Bore well within the project site. 4.1.3.1 Emergency Water Supply During electrical power failure, all circulation pumps will stop functioning. Under such circumstances it becomes imperative to maintain water circulation through key equipment cooling circuits. To combat against such eventualities overhead tanks of adequate capacity have been proposed. This will ensure immediate supply of cooling water with power failure at essential service terminal mentioned hereinbefore for sufficient period of time before starting the emergency diesel generator set. 4.1.3.2 Source of Make-up Water Supply Make-up water required for the system will be made available from bore well water within the project site.



29 29

4.1.3.3 Water Conservation Measures

The extensive recycling has been adopted in the design of plant water systems. Quality of circulating water will be maintained through dosing of conditioning chemicals for controlling corrosion, scale deposit and microbial growth.

4.1.3.4 Rainwater Drainage Adequate rainwater drainage system consisting of open drains has been envisaged to keep the entire plant free from water logging. Depending upon the available contours at detailed engineering stage, the number of drainage out fall and extent of open drains etc. will be decided. The surface runoff will be collected in the rainwater harvesting pond.

4.1.3.5 Sanitary Sewage Wastewater from canteen will be treated in the CPCB approved Soak Pit and Septic Tank. 4.1.4 Power Supply Power Supply will be met from In-house Power Plant of capacity 12 MW. The power generated within the plant will be utilized back to the plant and the excess power will be given to State/National Power Grid. 4.1.5 Transportation The accessibility and transportation of heavy equipment to site by road or rail is easy the plant location has been so chosen that is close to the main Iron Ore mining area i.e. Hospet, Bellary, Sandur and Chitradurga. It is also close to the main road, broad gauge railway line and nearer to the ports like Goa, Mangalore and Chennai, so that transportation to various sites of finished products is easy and economical. 4.1.5.1 Internal Transportation The transportation of raw material within the plant will be carried out mainly through covered belt conveyer and truck running on roads. The raw materials are conveyed from stockyard to process mainly by means of covered belt conveyer.



30 30

Final product is sent through covered belt conveyer to product house. Trucks used to dispatch final products.

According to requirement on production, transportation and maintenance & repair, two kinds of road (circle type and road having end) are arranged that link traffic systems in the surrounding area. Access roads shall be available to every main shop and every place for maintenance & repair. Internal transportation of materials like scrap, spares, etc among various shops will be carried out by vehicles belonging to the plant. Internal transportation of in-process material and disposal of waste materials will also be done by road. Transportation vehicles of different types have been envisaged in required number to take care of the transport requirement.

4.1.6 Other Facilities

4.1.6.1 Fire Fighting Facilities

Working premises at the critical points within the plant have hazardous and fire prone environment. To protect the working personnel, equipment and machineries, fire-fighting measures have been planned for the proposed plant. 4.1.6.2 Fire Protection Facilities

In order to combat any occurrence of fire within the plant premises, the following fire protection facilities have been envisaged for the various unit of the plant.

4.1.6.3 Portable Fire Extinguishers

All plant units will be provided with adequate number of portable fire extinguishers to be used as first aid fire appliances. The distribution and selection of extinguishers will be done in accordance with the requirement of IS: 2190-92.



31 31

4.1.6.4 Hydrant System

A fire hydrant network system has been envisaged for the plant. Internal hydrants will be provided at suitable locations and at different levels inside the major plant units. Yard hydrants will be provided normally along the road and in the close vicinity of the units. Hydrant system shall have dedicated pump house, pumps, water storage and piping network etc. 4.1.6.5 Automatic Fire Detection System

Unattended and vulnerable electrical premises like electrical control rooms, cable tunnels, MCC, transformer rooms, switchgear rooms, oil cellars, etc will be provided with automatic fire detection and alarm systems. 4.1.6.6 Automatic Extinguishing System

Outdoor transformers of more than 10 MVA/ 2000 litre oil capacity will be provided with fire detection and emulsifier (high velocity water spray) system.

4.2 Manufacturing Process The steel making project will comprise of establishing Steel Making Facility of 60,000 mtpa having induction Furnace route along with and continuous casting machine. 4.2.1 Selection of Equipment 4.2.1.1 Medium Frequency Induction Furnace: Medium Frequency Induction Furnace will be 15 MT capacity with 6000 KW / 6000 Volt Static Inverter Generator. Plant will have 2 Nos. Induction Furnaces and these will utilize:-

M. S. Scrap/ C.I. Scrap - 20% Continuous Feeding of DRI - 80% Melting and Tapping from IF - 120 Min.



32 32

The induction melting technology and Arc furnace technology in the Global Steel Scenario has brought a significant change in technological and revolution where it has been proved that the steel produced out of sponge iron mixed with Cast Iron and M.S. Melting Scrap/Pig iron coupled with electric induction furnace, medium frequency, constant power track and arc furnace rouge has become formidable process and can offer better economics at a relatively smaller scale operations. The process involves the charge mix of Raw material mainly Sponge Iron 80%, C.I. Scrap/ M.S. Scrap 20%, into molten bath with constant power track through Solid State generator converting A.C. Power into D.C. Power and again to convert the same into A.C. Power after changing the frequency of cycle in between 250 to 500 HZ through thyesisters (an electronic device). This converted A.C. power with a frequency of 250 to 500 HZ is passed through capacitor Rack after achieving the de-sired voltage and the same is passed through copper Bus Bar into Molten bath having copper coil, cooled through water circulation, transparent the heat energy into molten bath at constant voltage to melt the Iron and Steel at a temperature of 1550°C. The continuous efforts made by technologists in established mini steel plants all over India, sponge iron manufacturers and Medium Frequency Melting Induction furnace equipment manufacturer/arc furnace manufacturers have developed the process parameters by which considerable quantity of sponge iron are used in steel making. This has brought a new era in steel melting technology in the country where scrap scarcity can no more be a threat to the mini steel plants. The economy of steel making rather introduced Induction Furnace/arc furnace to convert sponge iron and scrap into steel where better productivity could be attained with proportionately lower scale. 4.2.2 Continuous Casting Machine Liquid Metal from Induction Furnace is carried in a ladle over the Concast Machine. The liquid metal flows from the ladle through a slide gate system underneath it into water cooled copper mould tubes which solidifies the liquid metal into a square shaped mould which we call as M.S. Billets.



33 33

From the considered casting cycle time, the number of strands required to cast 100 mm sq. and 200 mm sq. billets is worked out to be two (2). Based on the above, 2 strand billet casting machine suitable for casting up to 200 mm sq. Billets have been selected. Space provision will be made in the shop for installation of a second billet caster in future. 4.2.3 Process Flow for Manufacturing M.S. Billet

Fig 4.1: Process Flow for Manufacturing M.S. Billet

4.2.4 List of Plant & Machinery Steel Melt Shop

Table 4.2: List of Plant & Machinery Steel Melt Shop

BLENDING IN PREDETERMINED RATIO

RAW MATERIAL PREPARATION SPONGE IRON SCRAPS (SIZING & PROCESSING)

MELTING IN INDUCTION FURNACE

TAPPING OF MOLTEN METAL

CASTING IN CONCAST MACHINE

BILLETS



34 34

Sl. No. Particulars Qty. Set/No.

A MECHANICAL 1 6000KW/15000 kg medium frequency induction melting

furnace with hydraulic tilting arrangement, water cooled leads and one standard set of bus bar, Power pack supply unit with one 6000 KW Power and control system with 2 nos furnace selectors swtich arrangement and one hydraulic power supply unit and other related items

2.00

2

Closed Loop Water Cooling System Cooling Tower-Induced Draft, FRP Type,3000 LPM,Temo.drop42 to 32 degree celcius 2.00

3

Water circulating Pumps fitted with Motors,with Standby pumps

2.00

4 Pipeline fittings, vales, elbows 2.00 tees,strainers,etc.

5

DM palnt up-flow type, Plate type Heat Exchanger Assembly for furnace coil cooling (set), Slag Box charging Buckets etc. 1.00

6 E.O.T. Cranes * 63 T 1.00 * 40 T 1.00 * 10 T 2.00 7 Magnet 2.00 8 Bundling Press 1.00 9 Ladle 15 M.T. capacity 4.00 10 Slag Crusher Machine conveyor & other accessories. 1.00 11 Emergency Mould Set 1.00

12 Continuous billet casting machine twin strand 6/11 meter radius equipped to cast 160 mm sq. 1.00

* Structurals, Ladel operating, base plates & Cooling Bed for CCM 1.00

* Mould Tube Jacket, Spares, Lancing Pipes Etc. 1.00 13 Scaleban Equipment 1.00 14 Refractories 1.00

15 Lab Equipments,Temperature instrument, measuring instrument etc. 1.00

16 Charging Skips, Tendla, Spoons Laddle, Slag Box 2.00

17 Steel Fabrication Cranes erection, Crane gantry fabrication IF installation IF crucible installation frame, 1.00

18 Workshop Equipment, Tools and Tackles, Compressor etc. 1.00



35 35

Sl. No. Particulars Qty. Set/No.

B ELECTRICAL

1 Rectifier Duty Furnace Transformer7200 KVA, 11 Kv/1000 Vx2 2.00

2 Auxilary Transformer 1000 KVA, 11KV/415V 1.00

3 Bus bar from furnace Transformer to M.F.Generator and ducting. 2.00

4 LT Cable , Control Panel, Auxiliary Load Distribution System, CableTray etc. 2.00

5 Other Utilities like lighting, Earthing 1.00 C Pollution Control Equipment 1 Wet Scrubber 2.00

4.2.4.1 Air Pollution Control System Dust laden fumes from the furnace are sucked through the duct and passed through the cyclone where due to the venture effect the heavier dust particles settle at the bottom of the cyclone. Air now laden with lighter dust particles is sucked into the wet scrubber where it is washed causing water mixed with dust particles to settle at the bottom of the wet scrubber in slurry form. Clean air now is thrown into the atmosphere through the stack.



35 35

Fig 4.2: Air Pollution Control system for Steel Melting Shop



36 36

4.2.5 Rolling Mill The process involves converting the shape stock viz. Ingots/billets to desired finished section in hot condition by way of passing the material between a pair of grooved rolls and providing suitable reduction at various stages. Whole operation is conducted at a particular temperature range and within a limited time span. Stages of rolling operation are comprised of heating of feed stock to rollable temperature, rolling the feed stock in different mill stands, cropping the hot bar during process of rolling between stands as applicable and subsequently finishing in the form of hot rolled deformed bar in straight length. The hot bar coming out of last pass is then conveyed through TMT line and collecting in a cooling bed after shearing. The bars at almost ambient temperature are sheared to commercial length stored and kept ready for dispatch. In TMT process hot bars are subjected to quenching by means of an intense cooling installation (cooling installation specially designed water spray system). This step hardens the surface layer to martensite while the core structure remains austenite. When the bar is free of water chamber heat flows from core to surface and surface gets tempered to structure called tempered marten site. In the cooling bed due to atmosphere cooling, the hardened zone is tempered by temperature homogenization in the cross section and the austenite core is transferred to ducktile-ferrite-pearlite core.



37 37

4.2.5.1 Process flow chart of Rolling Mill

Fig 4.3: Process Flow Chart of Rolling Mill

Cooling of the Bars on Cooling Bed

Cutting of Billet to Definite Length

Rolling of Preheated Soaked Stocks through Number of Passes till the Required Nominal

Diameter of Bar is Attained

Preheating the Billets in Double Row Reheating Furnace

Shearing of the Bars with Flying Shares

Controlled Surface Quenching of the Bar in the TMT Quenching

Line

Shearing of Bars to Marketable Length

Dispatch

Size Wise Stacking of Rolled TMT Bars



38 38

4.2.5.2 List of Plant & Machinery Rolling Mill Division

Table 4.3: List of Plant & Machinery Rolling Mill Division

S.N. Descriptions Qty. Set/No.

(I) MECHANICAL A Complete Mill Stands 1.00 1 High Speed Flywheel Unit 1.00

2 Gear Box and pinion stands for complete mill 1.00

3 C.I. Couplings 1.00 4 Adopters 60.00 5 Bearings for complete mill 1.00 6 Spindles and cardon shaft 20.00 7 Rolls 1.00 8 Lubrication unit 1.00 9 Sprocket and diamond chain 1.00 10 Guiding Equipments 1.00 11 Bearing Chocks 1.00 12 Compressor 2.00 13 Sparkonix Machine 1.00 14 Rotary Shear 500 MM 2.00 15 Pinch Roll - 300 mm 3.00 16 Water pumps 1.00 17 C.I. Funnel 1.00 18 Universal couplings 38.00 19 Repeators 1.00 20 Roller Tables and Y-table 1.00 21 EOT Crane 10 MT Capacity 2.00

22 Crane gantry and Bus bar Steel Fabrication 1.00

23 Lab Equipment 1.00

24 Bed Plates for Pinion Stand, Mill Stand and motors 1.00

25 Water circulation system 1.00



39 39

S.N. Descriptions Qty.

Set/No. B Re-Heating Furnace 1 Refractories 1.00 2 Pusher and injector 1.00

3 Blower, ID fan, burners and heating pumping unit 1.00

4 Steel supporting structure, billet charging table 1.00

C Cooling Bed Area 1 Twin Channel with hydraulic power pack 1.00 2 Run out roller Table 1.00 3 Cold Shear 1.00 4 Cooling bed structure 1.00 5 W-channel 1.00 D T.M.T. Line 1.00

1 Water Quenching Line for 8 mm to 32 mm MS Bar

* Flying Shear and pinch rolls * Water Pressure Control * Tail breaker * High pressure pumps and Motors

* PLC system, drives and Automation system

E Gasifier 1.00 * Steel Structure 1.00 F Workshop Machinery 1.00 G Furnace Oil Storage Station 1.00

Oil Storage tank of 150 KL capacity Day Tank of 18 KL



40 40

S.N. Descriptions Qty.

Set/No.

Capacity with Oil Pumps and Pine line with all

necessary valves etc.

H Steel fabrication for Rolling Mill Machinery & TMT Line, 1.00

foundation bolts

I Pollution Equipment (Chimney, Wet Scrubber etc) 1.00

(II) Electricals a. Main Motors 1500 HP AC Motor 2.00 1000 HP AC Motor 1.00 600 HP AC Motor 1.00 500 HP AC Motor 1.00 450 KW DC Motor 2.00 250 KW DC Motor 8.00 Other Motors for all auxilliary equipments

b. Main A.C.Panels, DC Panels, Sub/starter panels 1.00

Cables 1.00 Cable tray 1.00 c. Liquid Rotor Starter 1.00

d. Automatic Power factor control equipments with Panel 1.00

e. Transformer 3000 KVA/11 KV/440 2.00 Transformer 2500 KVA 11 KV / 440V 1.00



41

CHAPTER - 5

RAW MATERIAL AND CONSUMABLES

5.1 Inputs/Raw materials for Production The production of every tone of steel in a plant involves consumption of about 3 tones of various raw materials. Transportation cost of raw materials becomes, therefore, an important consideration while identifying the raw materials sources with respect to the location of the plant. Besides, the raw materials must fulfill the quality specifications demanded by process, equipment and technology. 5.2 Advantages of Low Grade Ore

Even though Sponge Iron Plants are designed for high grade, high tumbler index iron ore, expecting input grade of 63% - 65% Fe, in reality the reserve for good grade ore is limited

Worldwide ore with Fe content above 62% is estimated to be only around

10% of total reserves. Even though the proportion in India is higher, it is fast getting depleted

Today sponge iron plants are forced to feed even 58% Fe ore into their kilns,

compromising on life of key machinery and quality & price of finished products

There is an enormous price disparity between good grade ores and low

grade ores. With huge profit margins in ores presently extracted by mine owners, they are least interested in investing in processing of low grade ores, in spite of pressure from Govt.

Table 5: Raw Materials for Production

Division Requirement and sources

Steel Melt Shop (SMS)

To produce steel billets to meet the requirements of proposed rolling mill. Further it will consume Sponge Iron produced in the proposed DRI division/Tunnel Kiln/RHF.

Rolling Mill (TMT)

For rolling of Steel Billets/Blooms produced in proposed SMS division and convert them into rolled products like TMT , angle, channels, beams etc.



42

5.3 Raw Material Requirement

5.3.1 Steel Melting Shop

Table 5.1: Raw Material Required for Steel Melting Plant

Raw Materials Raw Material Required per

Day (MT)

Raw Material Required per Month (MT)

Raw Material Required per Annum (MT)

Sponge Iron 370 MT 11,100 MT 1,11,000 MT Pig Iron 78 MT 2,340 MT 23,400 MT Ferro Manganese 6 MT 180 MT 1800 MT Boric Acid 0.4 MT 12 MT 120 MT Coke Breeze 1.2 MT 36 MT 360 MT Power 113 MW 3390 MW 33900 MW

5.3.2 Rolling Mill The basic raw material for proposed Rolling Mill plant is billets. The same will be available part from own melting shop and part from the nearby Steel Melting Shop.

Table 5.2: Raw Material Required for Rolling Mill

Raw Material Raw Material Required per

Day (MT)

Raw Material Required per Month (MT)

Raw Material Required per Annum (MT)

Billets 530 13250 1,60,000



43

CHAPTER - 6

ORGANISATION AND MANPOWER

6.1 Manpower Efficient management of the unit requires judicious manpower planning, selection of Qualified and experienced personnel and appropriate organizational structure, clearly defining functions and responsibility of managerial and supervisory staff. The manpower requirement in accordance with the targeted production of plant operation has been estimated on the following consideration:-

The estimated production and productivity level which is achievable in various sections of the plant with the proposed plant and machineries.

The total number of personnel required to perform various duties associated

with the different processing steps. A preliminary estimate of the manpower requirement allowing for leave, absenteeism, sickness and holidays for smooth and efficient operation of various sectors of the plant has been prepared purely on technical and managerial grounds primarily to indicate the order of manpower requirement. It would be emphasized that manpower requirement will have to be reviewed at time of commissioning of the plant. Further, implementation of industrial laws and regulations and locational factors of labour employment will also have to be considered. In order to operate and maintain plant facilities, including its technical general administration needs, estimated manpower requirement at full development stage of the project has been estimated to be 75 persons. Company has already appointed key personnel for the project. The Company has also appointed many middle and junior level staff who will work to complete the project within the schedule time frame. Least difficulty is expected in case of unskilled person as the same is available in plenty in Karnataka. It may be mentioned that the company shall be appointing skilled, experienced and semiskilled manpower requirement in connection with this industry by recruiting people from all parts of the Country.



44

6.2 Training Selected executives, key operating, technical and maintenance staff will undergo specific training in process licensor’s & turnkey equipment supplier’s associated plants. Other operating & maintenance staff will be trained at site, and will include

Company orientation for all employees

Safety training for all employee

Specific job training for all employees

Trade and basic educational training for selected employee



45

CHAPTER – 7

ENVIRONMENTAL CONSIDERATIONS

7.1 Introduction There is no sanctuary, national park or archeological monuments within study area of 10 km radius of the project site. There is also no Reserved/Protected Forests within the 10 Kms radius of the plant. The proposed expansion of would be equipped with modern, efficient pollution control devices to bring down the emission/discharge of pollutants within the acceptable norms stipulated by the environmental legislations. 7.2 Environmental Issues This section covers the followings;

The genesis of pollution, Principal sources of pollution, The nature of pollution Proposed measures required for meeting the prevailing statutory

requirements of gaseous emissions, waste water discharge characteristics, noise level etc.

For environmental management purpose in connection with the installation of Proposed plant.

Pollution prevention and control measures for each of the section are enumerated below: 7.2.1 Pollution from the Proposed Plant Air in and around the plant area and beyond its boundaries gets polluted with gases, fumes and dust particles emanating from the processes, chimneys, transfer points of conveying and handling equipment. The air pollutants generated from the steel plant are mainly dust and gases like Sulphur dioxide, carbon monoxide, nitrogen oxide etc. required efficient air pollution control equipments like dust collectors, regular water sprinkling on the haulage road, raw material storage yard etc will be provided and there by air pollution from the industry is negligible. The dust generated during movement of vehicles will be the main source of pollution, which will be taken care off by providing suitable mitigative measures like regular



46

maintenance of vehicles, covering the raw material/finished products with tarpaulin, regular water sprinkling arrangement etc. Noise generated from the power plant will have some impact on the surrounding environment and also on the working people. Necessary control measures will be adopted to ensure that the noise generated will be well within the limits. 7.3 Pollution Control Measures 7.3.1 Air Pollution Control The measures to control the air pollution will ensure the ambient air quality standards as laid down by Central Pollution Control Board for industrial and mixed-use areas. In addition, the emission from the chimneys will be kept below the permissible limits of statutory norms for dust. Gaseous emissions will be released through stacks of required height so as not to exceed ambient air quality norms due to the entire plant. The roads inside the plant premises will be asphalted to reduce the dust emissions. 7.3.2 Water Pollution Control The pollutants present in the waste water will be reduced to acceptable levels by adoption of the following schemes:

Re-circulating water in the process and blow down to specific process whereby discharged volume is negligible.

Close circuit cooling wherever feasible. Disposed off the domestic sewage in Soak Pit and Septic Tank. Storm Water Drainage –

Storm water drainage system shall consist of well-designed open surface

drains network so that all the storm water is efficiently drained off without any water logging.

Based on the rainfall intensity of the proposed area drainage system shall be designed on the basis of the storm water flow and the depth available at the out fall point so as to ensure no back flow.



47

Storm water drains shall be provided on both sides of roads. Rectangular

drains shall be provided based on the quantity of storm water to be conveyed and depth limitations.

For crossing roads, culverts shall be provided.

Sanitary sewerage system - The sanitary sewerage system shall be designed to cater the sanitary sewerage from plant premises:

The design of facial sewerage system shall be designed based on no. of

persons to be served and average daily consumption of water.

For inspection, cleaning and maintenance of sewer lines, manholes of reinforced concrete construction shall be provided at every bend, junction point of change in slope or diameter and on straight sections of pipes at intervals not exceeding 30 meters.

7.3.3 Noise Pollution Control Various measures proposed to reduce noise pollution include reduction of noise at source, provision of acoustic lagging for the equipment and suction side silencers, selection of low noise equipment, isolation of noisy equipment from working personnel. In some areas where due to technological process, it is not feasible to bring down the noise level within acceptable limits, personnel working in these areas will be provided with noise reduction aid such as ear muffler and also the duration of exposure of the personnel will be limited as per the norms. 7.3.4 Waste Material Management The various waste materials arising out of the technological processes would be reutilized to the extent possible. To comply with permissible limits of Ground Level Concentration of various gases, primarily SO2 and NOx or any other pollutants, suitable stack height will be provided to ensure proper dispersion. Other waste materials which cannot be reused are planned to be dumped in an environmental friendly manner in a separate area with required environmental control measures. 7.3.5 Green Belt Adequate green belt is being provided all around the plant and inside the plant premises. Locally available types of trees, which are resistant to pollutants is being planned.



48

7.4 Quality Control A chemical laboratory and quality control department will be planned to meet the routine necessities of the operative units of the plant for maintaining product quality and the targeted productivity. The Activities of this Department will comprise:

Collection and preparation of samples. Testing of raw materials and other process inputs. Inspection, testing and quality certification of finished products (pigs). Feed-back assistance to main production units to ensure control of process. Parameters and to take timely corrective measures. Assessment of process irregularities and in-plant failures standardization of

process norms. 7.4.1 Chemical Laboratory Keeping in view the above perspective, it has been envisaged that the plant will have one laboratory that will cater the requirement of raw material, slag and pig iron analysis. 7.4.2 Sampling All samplings will be done by manual method. For raw material testing sample will be collected from stockyard and belt conveyor carrying raw materials. Sampled materials will be transported to the laboratory for preparation and tests. 7.4.3 Sample Transportation Transportation of samples from sampling sites to the laboratory for preparation and testing will be done manually.



49

CHAPTER - 8

PROJECT IMPLEMENTATION AND SCHEDULE

8.1 Strategy The installation of several production units along with utilities and services require co-operation for procurement of equipment, equipment foundations, award of all contracts and supervision of all construction jobs at plant site. The project implementation schedule has been drawn up to maintain a strict time schedule. The factors which are responsible for timely implementation of the project are:- Arrangement of proper finance for the project. Finalization of layout of the proposed plant. Design of utilities and services. Placement of orders for plant and machinery. Arrangements for Govt. sanctions and supply of power. Recruitment of personnel.

8.2 Construction Materials It is envisaged that cement, reinforcing steel and structural steel materials, sheets will be procured by the company and issued to the contractors free of cost or at agreed recovery rates. For this, advance action has to be initiated by the company so that these materials are sufficiently stored in adequate quantity before commencement of the work at site. All other construction materials will be procured by the contractors. 8.3 Construction Facilities Construction facilities will mainly include providing construction water construction power, construction road and drainage, construction storages, Construction and fabrication yard, construction lighting etc. It is envisaged that these work shall be done/arranged by the company.



50

8.4 Project Implementation Schedule The Schedule of Implementation for all Plants is as follows.

Table 8: Project Implementation Schedule

Sl. Plant Operative From 1 60, 000 mtpa – SMS 2017 2 1.5 mtpa – Rolling Mill 2017

TERMS OF REFERENCE (ToR)environmentclearance.nic.in/writereaddata/Online/... · sms & rolling mill total extent: 24.75 acres proposed expansion to steel melting shop (sms) of 60,000

Documents