Manganese Ferro Alloys - Perspectives for the Steelmaker

Prabhash GokarnHead Marketing & Business Development, FAMD

Storyline- Manganese alloys essential for steel making.

- Like all RM even Mn : a) depleting resources in most regions, b) ore controlled & concentrated to a few leading to steeper increase in RM price than steel price profit shifting to RMc) HG ore prices increasing faster than MG & LG Ore prices as more concentrated (geographic) spread of HG ore.

- Way out :- Invest in technology for Mn alloys like steel industry has done for iron ore : viz

beneficiation, agglomeration, pre-reduction and coke : viz washing, stamp charging PCI etc.

- Beneficiation, Agglomeration, Alloy making not using electricity – direct reduction using coal/natural gas.

- Use of lower grades of ferro alloys that can be made from LG Ores which are more easily available.

Storyline Summary

• Steel Production Global + India Going Up• Manganese Alloy Demand Going Up• High Grade Manganese Ore Restricted To Few Countries & High

Consolidation Of High Grade Mn Ore Resource.• Globally Steel Industry Has Tackled Poor Quality Of Principal Raw

Materials – Iron Ore – By Viz Beneficiation, Agglomeration, Pre-reduction.– Coke - Washing, Stamp Charging, Pulverized Coal Injection Etc

• Indian Mn Ore Of Poor Quality, High Grade Ore Price Increase & Electricity Cost Increase + Shortage.

• Hence Need For Steel Industry To Invest In : – Beneficiation – Agglomeration– Alternate Methods Of Production For Mn Alloys

Presentation Flow

Manganese Ferro Alloys - Perspectives For The Steel Maker

CY11 CY12 CY13 CY14 CY15 CY16

649 684 715 747 781 816

973 1,026 1,073 1,121 1,171 1,224

1,622 1,711 1,788 1,868 1,952 2,040

Flats Long

Projected Global CS Growth (Mn MT)

FY12 E FY13 FY14 FY15 FY16 FY17

30 32 34 38 41 45

34 36 3944 48

5264 68 7382

8997

FP LP

Projected CS Growth in India (Mn MT)

Steel Production Global + India Going Up

World over, Manganese is the 4th most used metal in terms of tonnage after Iron, Aluminum and Copper. Total world’s production of Manganese Ore reached almost 47.21 million tons in 2010.

• About 95% of the world’s production of Manganese Ore is used directly or indirectly in steel making and other metallurgical usages.

• Manganese ore and Alloy Industry have historically derived demand from steel Industry and hence is directly related to the volatility and movement of Global steel Industry. World demand for Manganese ore depends directly on the outlook of steel Industry.

Manganese : Driven by Steel

Indian Steel Production Increase is Rapid

2011 2012 2013 2014 2015 2016 20170

1000

2000

3000

4000

5000

6000

1973 2033 2175 2327 2490 2664 2851

734 660 660 680 687 694 701388 328 335 345 355 366 377348 362 376 406 439 474

512

334 310 314323

333343

353

232 241 241260

263266

268

4193 4099 42674513

47474995

5260Global SiMn Demand

CHINA EUROPE JAPAN INDIAAMERICAS SOUTH KOREA OTHERs

2011 2012 2013 2014 2015 2016 20170

1000

2000

3000

4000

5000

6000

1973 2033 2175 2327 2490 2664 2851

734 660 660 680 687 694 701388 328 335 345 355 366 377348 362 376 406 439 474

512

334 310 314323

333343

353

232 241 241260

263266

268

4193 4099 42674513

47474995

5260Global FeMn Demand

CHINA EUROPE JAPAN INDIAAMERICAS SOUTH KOREA OTHERs

Global Manganese Alloy Demand is growing at > 6% yoy

Resulting in a Proportional Rapid Increase in Manganese Alloys Requirement Globally…

FY12 FY13 FY14 FY15 FY16 FY170

100

200

300

400

500

600

700

800

461 489 517560

652 683

SiMn Demand – India kT

FY12 FY13 FY14 FY15 FY16 FY170

50

100

150

200

250

140153

166180

196210

FeMn Demand – India kT

lndian Manganese Alloy Demand is growing at > 10% year on year

….. and in India

FY12 FY13 FY14 FY15 FY16 FY170

2000

4000

6000

8000

10000

12000

14000

4750 4814 5055 54097335 7996

976 1074 1202 1323

14811615

841 860 843910

11001100

1814 1658 978976

451400

8,655 8,685 8,3658,944

10,73411,531

SiMn Supply International kT

China India Ukraine South Africa Others2011 2012 2013 2014 2015 2016 2017

0

1000

2000

3000

4000

5000

6000

2189 2090 2299 2483 2682 2896 3128

416 449494

534576

623672

410 349325

328332

335338

400 365329

329329

329329

314 301 281284

287290

292

425 462 460460

460460

460

4154 4016 41884417

46654932

5219

FeMn Supply International kT

CHINA INDIA EUROPE CIS JAPAN OTHERS

Most Manganese Alloys – made in China

China is the largest consumer as well as producer of Manganese AlloysIndia is also a significant producer & consumer

Ukraine is the largest exporter of Manganese Alloys

FY12 FY13 FY14 FY15 FY16 FY170

200400600800

10001200140016001800

515 585 685 763 829 932

461 489517

560652

683976

10741202

13231481

1615SiMn Supply from India kT

Export Domestic Series3

FY12 FY13 FY14 FY15 FY16 FY170

100

200

300

400

500

600

700

800

309 341 368 397 426 462

140153 166 180 196

210449

494 534577

622672

FeMn Supply from India kT

Export Domestic Series3

India is a Significant Manganese Alloys Exporter

However, it is forecast that the proportion of Mn alloys needed to service the domestic steel industry will increase rapidly, and Mn alloy exports out of India (as

a proportion of production) will fall.

Asia accounts for 65% of World Steel Production and 70% of World Manganese Alloy Demand

Five Countries Account for 99% of Asia’s Mn Consumption, with China dominating

China and India have dominated this increase….

Growth of Asian Mn alloy production has been fuelled largely by imported Manganese Ore

Though, low grade Mn Ores are produced in many regions

MN ORE CONCENTRATION High Grade Manganese Ore available in few regions only…

High Grade Mn Ore

High/Med Grade Mn Ore

Low/Med Grade Mn Ore

MN ORE IS HIGHLY TRADED

This is why Manganese Ore is highly traded (fourth after crude oil, iron ore and coal)….

Manganese Ore sea borne volumes have risen sharply, with most manganese ore bound for Asia…China, India, Korea, Japan

South Africa; 6.27

Australia; 4.8Gabon; 2.52

Brazil; 0.8440000000

00001

Others; 5.796

Manganese Ore Exports, in Mn MT

And this high grade Manganese Ore comes from very few countries…. Highly consolidated supply base….

Import of Manganese Ore in India has rapidly increased ….

IFAPA 5 YEAR PLAN DATA

And is likely to increase in future rapidly too ….

Key Conclusions …• Asia is the key region for manganese demand, accounting for two thirds of global

consumption

• China is 70% of Asian consumption. Japan, India and South Korea also significant

• Asia will continue to increase as a percentage of global demand, fuelled by need for structural steels for construction and infrastructure in developing countries

• Asia overall is now consuming >90% of the Mn alloys it produces and is exporting less

• The region’s Mn alloy production is largely non-integrated, and increasingly dependent on imports of Mn ore from outside of Asia

AS HIGH GRADE MN ALLOYS ARE GETTING SCARCE, & IMPORT BASED ALLOY PRODUCTION IS NOT ALWAYS SUSTAINANBLE THERE IS AN URGENT NEED TO DEPEND ON THE ORE AVAILABLE IN INDIA – LOWER GRADES OF MN ORE WITH LOWER Mn/Fe

TECHNOLOGIES ADOPTED BY STEEL MAKERS TO COUNTER INFERIOR RAW MATERIALS :

Inferior Coals : Coal beneficiation by washing Use of semi coking coals by Stamp chargingUse of non coking coal by pulverized coal injection

Iron Ore : Iron Ore BeneficiationIron Ore fines used by sintering & pelletizingFlux input through sinter

Energy Efficient Alternate Technologies :Sponge Iron / HBI using coal & natural gas

Processes that use Inferior Raw Materials :Use of iron ore fines & coke/non coking coal fines in iron making by FINEX, ITKM3 etc.

Secondary Metallurgy :Ladle/runner treatment of hot metal for dePhos, deSulphurizationRH, RH-OB, CAS-OB, MRP, VD/VAD, AOD etc. for Steel refining

Steel Makers have developed technology to counter similar situation in iron ore and coal

NEED FOR SIMILAR ADVANCES IN FERRO ALLOY MAKING

Inferior Mn Ores :Mn Ore beneficiation (specially high Mn/Fe ores)

LAM Coke : Advances in use of alternate reductants : - coal, char, lignite, anthracite, wood

Energy Efficient Alternate Technologies : Advances in Non Electricity based processes for Ferro Alloy Production

- Direct Reduction using coal or gas (like HBI/sponge iron)- Coal based BF like production of FeMn and Spigelsen

Stabilization of DC Arc technology and it adoption in India/China

Ferro Alloy Processing :Post tap refining of ferro alloys – dePhos / deSulphurization / deCarburizeAdvances in direct pig casting of molten ferro alloys eliminating resizing and generation of fines etc.

Urgent Need for Similar Advances in Ferro Alloy Making

Back UpSummary of Technological Advances in Steel Making

Technology Developments(1) : Beneficiation,Agglomeration,Reduction

Technology Developments(2) : BF Iron Making Advances…

Technology Developments(3) : New Smelting Technologies

Technology Developments(4) : Steel Making, Secondary Refining, Continuous Casting

Technology Developments (5) Non Coking Coal Use