Techno Economic Feasibility Report of M/s Bravo Sponge Iron Pvt Ltd. At: Mahuda P.O- Rukni in Purliya district of West Bengal

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1 CHAPTER-1 INTRODUCTION M/s Bravo Sponge Iron Pvt. Ltd. has existing 1x95 TPD & 1x100 TPD DRI kiln producing 62,400 TPA Sponge Iron for sale village- Mahuda, P.O- Rukni, Puruliya District of West Bengal 1.0 Importance of the project to the country and region TMT rod and bar products are normally used in constructional/structural work so products have demand for development of infrastructure of a country. Steel is a basic commodity for all industrial activity and its consumption marks industrial prosperity. The steel industry has tremendous forward and backward linkages in terms of material flow, income and employment generation. Steel is a core industry and thus its demand is strongly linked to the overall economic activity of the nation. Given the inherent long-term potential of the Indian economy and its cyclical nature, the long-term prospects of the steel industry are fairly comfortable. The demand and production has been growing at a healthy rate for the last few years and the forecast for the next decade and half is also very promising. It has been estimated by certain major investment houses such as Credit Suisse that India s steel consumption will continue to grow at 16 % rate annually fuelled by demand for construction projects worth US $1 trillion. The scope for raising the total consumption for steel is huge, Per capita consumption of steel at current levels is about 65 kg. As a comparison per capita steel consumption in China is 430 kg and the world steel consumption per capita average is 180 kg. By the demand at 7 % and 8 % GDP growth is estimated to be 123 million tons and million tons respectively. Taking a mean figure of 130 million ton, there is a need of 65 million ton in 10 years time. This translates into an average growth requirement of about 10 million tons per year. Ministry of steel has projected that steel capacity in the country is likely to be million tons by Further based on the status of MOUs signed by private producers with various State Govt., it is expected that India s steel capacity would be nearly 293 million tons by Global Steel Scenario: Steel is a key driver of the world's economy. The industry directly employs more than two million people worldwide, with a further two million contractors and four million people in supporting industries. In 1950-India and China had same level of per capita consumption of steel. But then India remained mostly stagnant whereas China went about Industrialization and increased its production as well as consumption. However India improved between 1997 to 2003, but steel then per capita steel has remained very low in comparison to China. 1

2 In 2007 World steel output reached million metric tons and showed a growth of 7.5% over previous year. China remained World s largest crude steel producer in 2007 producing million metric tons and USA India occupied 5 th position producing million metric tons for the second consecutive year. In 2013 the world crude steel production reached 1606 million tons and showed a growth of 3% over (Source: World Steel Association or WSA) China remained the world s largest crude steel producer in 2013 (779 mt) followed by Japan (111 mt), the USA (87 mt) and India (81 mt) at the 4th position. WSA has projected Indian steel demand to grow by 3.3% in 2014 as compared to global steel use growth of 3% and Chinese growth of 3.1%. For 2015, further recovery is projected for world (3.3%) and India (4.5%) and a slowing down for China (2.7%). Per capita finished steel consumption in 2013 is estimated at 225 kg for world and 515 kg for China. 1.2 Domestic Steel Scenario: The Indian steel industry has entered into a new development stage from , riding high on the resurgent economy and rising demand for steel. Rapid rise in production has resulted in India becoming the 4 th largest producer of crude steel and the largest producer of sponge iron or DRI in the world. As per the report of the Working Group on Steel for the 12 th Plan, there exist many factors which carry the potential of raising the per capita steel consumption in the country, currently at 59.2 kg. These include among others, an estimated infrastructure investment of nearly a trillion dollars, a projected growth of 2

3 manufacturing from current 8% to 11-12%, increase in urban population to 600 million by 2030 from the current level of 400 million, emergence of the rural market for steel currently consuming around 10 kg per annum buoyed by projects like Bharat Nirman, Pradhan Mantri Gram Sadak Yojana, Rajiv Gandhi Awaas Yojana among others. At the time of its release, the National Steel Policy 2005 had envisaged steel production to reach 110 million tons by However, based on the assessment of the current ongoing projects, both in Greenfield and Brownfield, the Working Group on Steel for the 12 th Plan has projected that the crude steel steel capacity in the county is likely to be 140 mt by and has the potential to reach 149 mt if all requirements are adequately met. The National Steel Policy 2005 is currently being reviewed keeping in mind the rapid developments in the domestic steel industry (both on the supply and demand sides) as well as the stable growth of the Indian economy since the release of the Policy in The liberalization of industrial policy and other initiatives taken by the Government have given a definite impetus for entry, participation and growth of the private sector in the steel industry. While the existing units are being modernized/expanded, a large number of new steel plants have also come up in different parts of the country based on modern, cost effective, state of-the-art technologies. In the last few years, the rapid and stable growth of the demand side has also prompted domestic entrepreneurs to set up fresh Greenfield projects in different states of the country. Crude steel capacity was 102 mt in and India, the 4 th largest producer of crude steel in the world, has to its credit, the capability to produce a variety of grades and that too, of international quality standards. The country is expected to become the 2 nd largest producer of crude steel in the world by , provided all requirements for creation of fresh capacity are adequately met. Further based on the status of MOUs signed by private producers with various State Govt., it is expected that India s steel capacity would be nearly 293 million tons by [Source: Ministry of Steel] Importance of various units DRI KILN Sponge iron is the metallic form of iron and Scarp substitute produced from reduction of iron oxide below the fusion temperature of iron ore ( C) by utilizing hydrocarbon gases or carbonaceous fuels as coal. The reduced product having high degree of metallization exhibits a honeycomb structure, due to which it is named as sponge iron. As the iron ore is in direct contact with the reducing agent throughout the reduction process, it is often termed as direct reduced iron (DRI). 3

4 IF The various types of Induction Furnaces used for Steel making are medium frequency and high frequency. Mild steel, Stainless Steel and low and high alloy Steel can be made from these furnaces. Raw materials used are DRI, Pig Iron & Scarp. Charge is heated by eddy current.alloying elements are added as per the requirement and the induction furnaces are provided with matching billet casters. Rolling Mill: Steel Billets/blooms from Billet Caster are cut to desired sizes and either fed to hot rolling mill for processing or transferred to raw material shed stored. Cold Billets are transferred to roller table and pushed through the Reheating furnaces which are heated and soaked up to C The Billets/blooms are then processed through roughing mill, intermediate mills and finishing mills to get the finished rolled products. Re heating of Billets will be done in reheating furnace by burning surplus BF gas. Then rolled products are cropped & caught in required commercial length by hot saws. Location Map of project site 4

5 Satellite imagery of location-bravo Sponge Iron pvt. Limited 5

6 Justification of the project The company produces steel Billets in its existing unit which is a semi finished product and unless same are converted to marketable products, the project is less profitable. Again TMT Bar has high market demand for its utilization in construction work. Hence expansion of Bravo Sponge Iron Pvt Ltd is justified. Undoubtedly the development of this industrial project will give rise to the production of finished products like construction material which is in demand. In the meanwhile generation of various wastes would also take place from the project and there by environmental degradation is anticipated. However the use of advanced technology and proper management, planning and application of meticulous Environment management plan, shall substantially reduce environmental problems and the project shall becomes acceptable as it leads to socio-economic development of the region. Authorization M/s. BRAVO Sponge Iron Pvt. Limited has entrusted M/S, a NABET accredited their expansion project. A Grade Environment consultant Bhubaneswar for preparation of TEFR for 6

7 In accordance to the scope of work, M/s. team visited the project site at- At-Mahuda, P.O- Rukni, in Puruliya District of West Bengal. During their visit the team collected information on site and availability of infrastructure facilities like raw materials, water, power and transportation facilities available for the existing unit and space available for expansion. The representative of M/s. Bravo Sponge iron Pvt. Limited accompanied team during visit to their site. ACKNOWLEDGEMENT GLOBAL EXPERTS, Bhubaneswar expresses its deep gratitude to management of M/s. Bravo Sponge Iron Pvt. Limited for entrusting the assignment of making report and providing all documents required for submission of form-1 and TEFR and for the active interest and cooperation extended by the concerned officials of M/s Bravo Sponge Iron Pvt Ltd. 7

8 2.1 SITE LOCATION CHAPTER-2 SITE AND INFRASTRUCTURE A Plant is set up at a place, where men, machinery and material are brought together to manufacture the product. The success and failure of an Industry greatly depends on its location. Therefore location must be based on careful consideration of all the factors that are essentially needed for successful running of an Industry which may provide maximum advantage. The most important factors on which the selection of site depends are 1) Proper Geological region, 2) Appropriate location in the region. The location of an Industry is determined by following factors. a) Availability of Raw materials nearby b) Availability of Industrial vacant land for Industry and its expansion in future. c) Availability of water needed for the Industry. d) Availability of power. e) Nearness to market. f) Availability of Labor. g) Good transport facility. h) Suitable climate and Topography. Location of the proposed project site fulfils all the above conditions to a large extent. The site is located at At- Mahuda, P.O-Rukni in the district Puruliya of West Bengal The plant location and Latitude ' 53.49" N & Longitude ' 49.70" E. 2.2 LAND The company has already acquired acres land and running the existing plant, vacant space in it will be utilized to accommodate expansion project. The total land use will be as follows. LAND USE PATTERN Sl.N FACILITIES AREA IN ACRES o. 1 Plant Facilities Office Admin Building Canteen RMH & Storage Dispatch & Parking Bay Green belt Water Storage Internal Roads Fuel Storage Solid Waste Disposal Vacant Space 2.69 TOTAL (As provided by Project Proponent) 8

9 All raw materials are proposed to be received through Rail and in dump trucks and unloaded in the raw material receiving yard. Sufficient space is earmarked to cater to the needs of all the units of the plant. Different plant units will be laid out considering the need of optimized earthwork, rational material flow, economy of operations and the space requirements for rational development. The general layout of the proposed plant has been developed keeping in the view the following factors: Smooth & uninterrupted flow of materials in accordance with the technological requirements Contours & gradient of the site Optimum lead for transport of materials & for service lines Predominant wind direction Logistic approach in location of technological units as well as service facilities Safety clearances & statutory provisions The major consideration that has been given for making layout is given below. The storage facility and raw material & isolating areas have been located near the main processing area. But care has been taken to see that expansion will not be hampered in future. The processing areas are situated at the centre of plant so that all other required material can be easily available; the area of processing has been such that movement of worker & flow of material within the processing unit, location of equipment & their maintenance easy. The storage facility has been nearer to the processing area so that the production flows from department to storage easy. A space has been reserved for loading & unloading of product. Proper regard has been shown in placement of each of services like the distribution of water, power refrigeration unit & electricity. Adequate green belt in 33% of total land within the plant boundary and on the periphery of the proposed project will be developed to reduce pollution load on environment as it acts as a sink of dust and noise pollution load. Connectivity Project area is 0.5 km from SH-12, 0.5 km from SH-8 and 28 km from NH-60A 9

10 PROCESS DESCRIPTION CHAPTER-3 PROCESS DESCRIPTION M/s Bravo Sponge Iron Limited has an existing running unit producing Sponge Iron for sale for external consumption. The Project Proponent now proposes expansion of this unit to enhance the capacity of the unit by backward and forward integration. Project configuration and product mix has been given below. PROJECT CONFIGURATION SL NO FACILITY CONFIGURATION CAPACITY PRODUCT ENDUSE 1 DRI kiln 1x100 TPD 1x95 TPD Existing Expansion 62,400 TPD Sponge Iron Use in IF 2 DRI 2x100 TPD 64,000 TPD Sponge Iron Use in IF 3 IF 4x15 T 1,92,000 TPA Hot Metal Use in CCM 4 CCM Matching 1,90,000 TPA Billet Use in RM 5 Rolling Mill 600 TPD 1,90,000 TPA TMT Bar/ Rod 6(a) CPP WHRB 8 MW Power Internal Use 6(b) CPP AFBC 10 MW Power Internal Use Sale 10

11 FLOW SHEET Raw material requirement (Existing + Expansion) Sl.No Material Quantity in TPA Source 1 DRI Grade Iron Ore 85,508 Jharkhand/ Odisha 2 Lime stone / Dolomite 820 TPA Local purchase/ M.P 3 Coal(DRI) 78,500 TPA Eastern Coal Field 4 Coal(AFBC) 42,150 TPA Eastern Coal Field 5 Pig 22,500 TPA Local purchase 6 Scarp 12,000 Local purchase Power requirement for the unit inclusive of existing UNIT CONSUMPTION IN MW DRI 3.2 IF & CCM 9.0 Rolling mill 2.0 Power plant internal consumption 1.8 Lighting & Auxiliary 2.0 Total power requirement

12 Power requirement Captive power generation Power to be purchased MW MW Nil WATER REQUIREMENT (Existing+Proposed) UNIT TOTALMAKE UP m 3 /Day DRI 315 IF 120 ROLLING MILL 150 POWER PLANT(Air Cooled) 600 Drinking & Sanitation 30 Green Belt 20 TOTAL 1235 Water requirement for the proposed project comes to about. 1,235 m 3 /day. 12

13 CHAPTER-4 ENVIRONMENTAL MANAGEMENT PLAN Industries do pollute the environment. Nevertheless industrial growth has been receiving tremendous boost all over the world. Over 60-75% of the pollution in the world is related to industrial production and consumption of fossil fuel and the developed countries have the major share in it. The present global model of development for prosperity is directly linked to industrial growth and hence even the developing countries have to initiate industrial development for their progress, although most of them are lagging far behind the others. AIR ENVIRONMENT Sl. No Section/Unit Operation 1. Raw Material and scrap Handling Stock, crushing, screening, conveyor transfer & charging etc. 2 DRI kilns Reduction of 4 SMS (IF)& Billet casting Unit pellet/iron ore with lime and coal Melting of pig, hot metal, scrap & Ferro Alloys using O 2 & lime. Casting of refined liquid steel in moulds of billet 5 AFBC Generation of Steam from coal and waste heat from BF and Coke-oven Emission released waste generated Fugitive dust emission Particulate matter,co 2, SO 2 and NO X Water vapor Waste water containing iron scales, CO 2, Oil & grease from scrap. EOF and LF slag. TSP, CO 2, SO 2, NOx and generation of fly and bed ash Types of pollution Air pollution Noise pollution Heat & Air pollution Air, thermal, Water & soil pollution Air pollution Land pollution Pollution control measures Bag filter & 35m stack WHRB, ESP and high stack Water scrubber, settling pond, Fume extraction scrubber and Bag house with 55m stack Flue gas Lime scrubber, ESP & stack 13

14 Water environment Sl. No Section/Unit Operation Emission released waste generated Types of pollution Pollution control measures 1 SMS (IF)& Melting of pig, Water vapor Waste Water & soil Water Billet casting hot metal, scrap water containing pollution scrubber, Unit & Ferro Alloys iron scales, CO 2, settling pond, using O 2 & lime. Casting of refined Oil & grease from scrap. IF and LRF scrubber liquid steel in slag. moulds of billet 2. AFBC Generation of generation of fly Water & soil Ash settling Steam burning by coal, ash slurry pollution by leaching pond with impervious Dolchars for use bottom in Turbo generator SOLID WASTE AND ITS MANAGEMENT Solid waste in the form of dust, slag, scrap and ash will be generated from this Steel plant and shall pollute the environment unless managed properly. Following solid waste will be generated from the proposed project. Mitigation measure is given below. Solid waste Quantity in TPA Mitigation measure Char 41,280 TPA Use in AFBC IF Slag 33,500 TPA To be used in Land fill Fly Ash (WHRB) 38,105 Sold to Cement Plant & Brick Manufacturing Fly Ash (AFBC) 36,105 TPA Sold to Cement Plant & Brick Manufacturing Bottom Ash 5,687 TPA Cement Plant/ Land facilities Rain water Harvesting M/s Bravo Sponge Iron Pvt. Ltd will go for rain water harvesting from the project area to reduce consumption of fresh water make up and specially to meet lean season deficit of river water. The average annual rain fall of the project area is about 1445 mm=1.45m Total project area is19.69 acres=67,460.98m 2. Hence with 50% loss towards evaporation & percolation about 48,638.66m 3 of rain water can be harvested per annum and stored in Rain water harvesting pond. Rain water harvested can meet the plant requirement of about 40 days. 14

15 Greenbelt Green belt has already been developed in about 33% area of the total land and it has been developed all around the plant boundary and by the side on internal roads. This will serve as dust sink of the project and will not allow the excess sound level of project to go out. Local species of trees having good canopy area will be selected for developing green belt in consultation with forest department. NOISE POLLUTION MANAGEMENT The noise pollution management will be taken up in following manner By selecting low noise generating equipment, which would have below 85 db A at 1m distance. This is taken care at the equipment design stage. By isolating the noise unit from the working personnel s continuous exposure by providing acoustic aids for plant personnel. Use of PPE like ear muff etc. By administrative & safety measures, providing noise level monitoring, remedial measures, providing noise safety appliances. The noise impact on the surrounding environment during the construction phase will be within acceptable limits. The operation of high noise generating equipment shall be restricted during the night time. 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 and isolation of noisy equipment. The plant personnel in noisy area will be provided with high noise reduction aid such as ear muffler & also the duration of exposure of the personnel will be limited as per the norms. Thick green belt development is planned for the attenuation of noise pollution and to maintain ambient noise quality within the statutory limit Carbon Credit Opportunities through CDM activities Carbon credit is a generic term to assign a value to a reduction or offset of greenhouse gas emissions, usually equivalent to one ton of carbon dioxide equivalent (CO2-e). The Waste heat from DRI Kiln shall be utilized for the generation of of electrical power through Waste Heat Recovery Boiler (WHRB). This power generation would have required Tons of coal per hour MW power generations from WHRB can save about 54,761 Tons per annum of coal burning as thus atmospheric emission of pollutants will be reduced. With a saving of these amounts of coal shall reduce the CO 2 emission. These activities shall make the company to eligible for availing carbon credit facilities. Cost towards Environment Management At least 4% of total project cost i.e. about 6.2 crores will be spent towards Environment pollution control with which ESP, Bag filter, Tailing pond and ash pond etc will be installed along with other plant machineries. 15

16 CHAPTER-5 ESTIMATATION OF PROJECT COST AND TIME SCHEDULE PROJECT COST DISTRIBUTION: Facilities Estimated Project Cost (LAKHS) Land & Site development Civil Buildings Structure Buildings Plant machinery & Electrical 12, Erection & installation Waste Heat cleaning System Miscellaneous Fixed Assets Contingencies Engineering & Consultancy Charges Working Capital Total Amount 15,634 Project schedule It is expected that after getting EC tenders will be floated for equipments and other activities and establishment and commissioning will be completed in 3yr of time. Employment opportunities For the proposed project activities skilled and unskilled manpower will be needed. This will temporarily increase the employment opportunity. Secondary jobs are also bound to be generated to provide day-to-day needs and services to the work force. This will also temporarily increase the demand for essential daily utilities in the local market. The manpower requirement for the proposed project will generate some permanent jobs and secondary jobs for the operation and maintenance of plant. This will increase direct / indirect employment opportunities and ancillary business development to some extent 16

17 for the local population. This phase is expected to create a beneficial impact on the local socio-economic environment. About 350 people will get direct employment in various grades. This figure includes employment in technical, operation, maintenance, finance, commercial, personnel and general administration. ESC (Enterprise Social Commitment) The company will utilize Rs.8 crores i.e.5% of total project cost of Rs 157 crores towards ESC activities, this fund shall be utilized over a period of 5 years of profitable production. The allocation of fund will be mainly based on public demand during Public Hearing and socio-economic study of the project area. The project has several beneficial impacts which will obviously improve the socioeconomic conditions of the locality. Those are mainly Improvement in infrastructure facilities Improved business opportunity Direct & indirect Employment opportunity Revenue generation to central & state government. Allocation of 5 % of the project cost towards the ESC When there will be and industry there will be some negative impact whatever small it may be due to implementation of pollution control system and management. When the same is superimposed with the project benefits that include employment, trade & business opportunity, infrastructure development, greenbelt development and peripheral development, which trickle down to lower strata of population the TIS (Total Impact Score) comes out to be positive indicating the clear acceptability of the project. 17